From Alabama to Wyoming, Captive
States...
Alabama
A proposed Alabama Predatory Lender's Act, a/k/a "Consumer Equity
Protection Act," House Bill 29, Senate Bill 204 -- was introduced March 4, 2003, got
referred to committee - and was then apparently forgotten. Here are some related
proposals, --House
Bill 529; Senate
Bill 273; HB
206 (all in pdf format) and the Alabama State Legislature. On the preemption front,
currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its office in Alabama (709 Azalea Road in Mobile) into a branch of a
federal savings bank, to escape state laws...
ICP/Fair Finance Watch has for example fought Birmingham-based AmSouth, when it
made a move on First American / Deposit Guaranty (see “Groups Say Loan Denial
Rates High,” The Tennessean), which later settled (see “Bank settles 'unfair lending'
claims,” The Tennessean).
In Predatory Bender, Tom Bain tracks Amsouth. Jack Bender and his
daughter Zalie, starting from their days together in Charlotte, North Carolina,
have always liked Waffle House. What's not to like?
This - here are five CitiFinancials
in and around Birmingham, AL:
260-E West Valley Avenue, Birmingham, AL 35209 - 205-945-9484
5415 Beacon Drive, Birmingham, AL 35210 - 205-956-0040
266 Gadsden Highway, Birmingham, AL 35235 - 205-833-2867
655 Fieldstown Road, Gardendale, AL 35071 - 205-631-9900
174 Centre At Riverchase, Birmingham, AL 35216 - 205-823-7997
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Map, @ Inner City Press
Alaska
State Mortgage bank Regulator:
Alaska Division of
Banking Securities & Corporations
Here ICP/Fair Finance Watch, along with Alaska PIRG, fought Wells Fargo Financial, see, “Watchdogs
Challenge Wells Fargo's Alaska Plans,” by Ron Leuty, San Francisco Business
Times, April 24, 2000, and, from grassroots newspaper not on the Web, “Groups Want to
Halt Wells Fargo Merger,” by E. Burkett, Mat-Su Valley Frontiersman (Alaska), April
25, 2000, Pg. A1; “Move to Delay National Bank of Alaska Takeover,” Kodiak (AK)
Daily Mirror, April 19, 2000, etc.. The town of Homer, on the Kenai peninsula, helped
inspired Inner City Press' Alaska
Report. Among ICP's Alaska favorites is this site for pro se litigants. Its
side focus on domestic violence would not favor Jack Bender -- maybe that's why Jack
hasn't yet been to Alaska...
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Arizona
State Mortgage bank Regulator:
Arizona State Banking Department
In February 2003, House
Bill 2414, "Home loans; prohibited activities," was introduced. On the
preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its nine offices in Arizona into branches of a federal savings bank,
Chase FSB, to escape state laws... Also in Feb. 2003, ICP/Fair Finance Watch filed the
following Freedom of Information
appeal, with the Arizona Attorney General's office, regarding real-live predatory lender
Household International:
Dear Assistant AG Kane, Attorney General Goddard, and FOI Appeals
Officer:
On behalf of the Inner City Press/Community on the Move and its
members, and of the Fair Finance Watch (collectively, "ICP"), this replies to,
and appeals from, Assistant Attorney General Kane's Feb. 11, 2003, letter (the
"Denial") denying access to records responsive to ICP's Jan. 10, 2003, request.
Despite the arguments made in AAG Kane's Denial, we wish to inform
you that we have received from other states' Offices of Attorney General numerous
documents, including many sent to and from to <sandra.kane [at] AG.state.AZ.US >.
Given that some of these communications are with regard to the payment of funds to the
State of Arizona and to other states, under most readings of the public disclosure statute
this makes their withholding, in the face of the month-old request, particularly
inappropriate. ICP's focus, however, is that your Office address Household's and HSBC's characterizations of the
Settlements, to regulators and to the public. These documents make it clear that many the
records to which AAG Kane is denying access are otherwise publicly available, and are not
viewed as falling within the (identical) confidentiality provisions of the Household
Consent Judgments (which ICP in any event contends are contrary to public policy and the
principles of open government, see below).
The remainder of the Denial seems to claim (1) that a requested
"financial analysis" (referred to on the Washington State Attorney General's web
site) is somehow "attorney" work product (in this regard we note that other
states' AG's Offices have provided us with various financial reports they collected /
considered during the multi-state negotiation with Household); (2) that the investigations
of Household are still "pending" (despite the release in the Consent Judgment --
if the argument is that until all funds are paid in March, it's all confidential, that
logic is contrary to public policy: no review of governmental deal until five months after
it was announced, and three months after it was filed in court, and portrayed as
"final" by the allegedly predatory lender - see also, Cox Arizona
Publications, Inc. v. Collins, 175 Ariz. 11, 14, 852 P.2d 1194, 1998 (1993), wherein
the Arizona Supreme Court reversed the court of appeals' ruling that the public is not
entitled to examine police reports in "an active ongoing criminal prosecution."
The Arizona Supreme Court held that such a "blanket rule… contravenes the strong
policy favoring open disclosure and access." Thus, public officials bear the
"burden of showing the probability that specific, material harm will result from
disclosure" before it may withhold police records. Mitchell v. Superior Court,
142 Ariz. 332, 335, 690 P.2d 51, 54 (1984) -- and (3) that all "inter-agency"
communications can be withheld. By that logic, a comment letter by the Attorney General
to, for example, the Federal Reserve, in a rulemaking proceeding, would be withheld. That
clearly is not the law. The improperly withheld records should be released, under the fee
waiver ICP has requested.
The Denial acknowledges that your Office received ICP's December
2002 letter regarding HSBC's proposed acquisition of Household; we note that we never
received any response from your Office, despite the central role you played in the
Settlement with Household. Please consider: we have been informed by others in the
multi-state group (with whom your Office is clearly in contact, as reflected by documents
we've been provided with) that they "do not have any comment on the scope of the
settlement since we believe the Consent Decree adequately addressed the issue." That
quote is from the Florida Attorney General's Office; it is substantially identical to a
recent statement from the Washington State Attorney General's Office, which was also very
involved in the Settlement, along with the New York Banking Department and Superintendent,
your Office's communications with which we are specifically requesting in connection with
this appeal, due to conflict of interest issues which have arisen in light of Household's
Jan. 31, 2003, disclosure that it formally retained Goldman Sachs, where the N.Y.
Superintendent's husband is a managing director, on May 1, 2002, to find a buyer for all
or part of Household's business. Your Office's withholding of responsive records
ill-serves not only consumers, including in Arizona, but also the public interest and
principles of open government.
As Jack Bender might say, "That and a token will get you on the subway."
Except that, in New York City at least, they no longer accept tokens... In 2002
in the Phoenix MSA, for conventional home purchase loans, the mormally-priced CitiMortgage
denied loan applications from African Americans 4.27 times more frequently than
applications from whites. This is much worse than other lenders in this MSA: the denial
rate disparities for the industry as a whole in 2002 were 2.0 for African Americans.
Here are three subprime-lending CitiFinancials
in and around Phoenix, AZ:
5563 N. 7th Street, Phoenix, AZ 85014 - 602-266-7055
5830 N. 43rd Avenue, Glendale, AZ 85301 - 623-939-7620
9201 N 29th Avenue, Phoenix, AZ 85051 - 602-943-6601
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Arkansas
Arkansas Securities
Department
The Arkansas Home Loan Protection Act, House Bill 2598, became effective on July
16, 2003, as "Act 1348 of 2003." On the preemption front, currently
state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its three offices in Arkansas (Little Rock, Springdale and
Bentronville) into branches of a federal savings bank, Chase FSB, to escape state
laws...Land of Clintons and Wal-Mart,
and one of the states, like Delaware, which
limits access to documents under FOIA to citizens of the state. ICP appealed:
Dear Deputy Attorney General Hansen and Attorney General Beebe:
On behalf of the Inner City Press/Community on the Move and its
members, and of the Fair Finance Watch (collectively, "ICP"), this regards Mr.
Hansen's Jan. 14, 2003, Denial of ICP's request, under the Arkansas Freedom of Information
Act and otherwise, for records related to your Office's recent Settlement with Household
International, Inc. ("Household"), etc..
The context of ICP's request, in brief, is that Household has been
charged in all fifty states with predatory lending, has entered a settlement that many
consumers' organizations including FFW contend is too limited, and has now proposed to be
acquired by the London-based Hongkong Shanghai Banking Corporation ("HSBC"). It
is in the public interest to disclose the specifics of any and all complaints against
Household (and, for comparison's sake, certain of its peers) in Arkansas, and to disclose
the specifics of the Settlement in Arkansas. We note again that on Dec. 19, 2002,
Household issued a press release stating that "[a]ll 50 states and the District of
Columbia have agreed to participate in the program." For your information, numerous
Attorney General's Offices in other state have provided ICP, without cost, with copies of
complaints and other records in response to nearly identical Jan. 10, 2003, requests from
ICP.
Deputy Attorney General Hansen's Jan. 14, 2003 letter (the
"Denial") provided not a single document. Rather, the Denial cites to the
"citizens of Arkansas" provision of Arkansas FOIA, without addressing the case
law thereunder and its applicability to ICP's request. For example, Arkansas Hwy. &
Transp. Dep't v. Hope Brick Works, Inc., 294 Ark. 490, 744 S.W.2d 711 (1988), held
that the FOIA's intent includes a corporation doing business in this state as being a
party entitled to information. Hence, representative of corporation is entitled to receive
any information that any other person would be entitled to receive pursuant to the FOIA.
For your information, Inner City Press is inter alia a
news media organization, which serves and has readership in Arkansas, including via
<www.InnerCityPress.org>. While it should not be necessary, we note for example that
InnerCityPress.org is listed on the Federal Financial Institutions Examination Council's
Web site as a nationwide resource on the Community Reinvestment Act (see also, e.g.,
the Arkansas Democrat-Gazette of April 11, 1999, "The color of home loans in central
Arkansas," quoting ICP on lending discrimination in central Arkansas).
The appeal was denied - but ICP will soon (12/03) be litigating this
issue, in at least one of the four states...
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California
State Mortgage bank Regulator(s):
California Department of
Corporations
California Department of Real
Estate
Los Angeles passed a predatory lending ordinance, 01-1476, available here
(in pdf). Oakland passed Ordinance 001299a. Statewide, there's AB 489, adopted as
Chapter 732 of 2001, and effective July 1, 2002. On the preemption front, currently
state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its 54 offices in California into branches of a federal savings bank,
Chase FSB, to escape state laws... The 2002 fight against Citigroup - Golden State
Bancorp (another ICP
collaboration with CRC) unearthed much dirt
from Citigroup's closet, including for example about the ROCopoly compensation scheme,
"incenting" employees to hard-sell insurance...
In 2002 in the Oakland MSA for conventional home purchase loans, Citibank
(Citibank FSB and CitiMortgage together) denied loan applications from African Americans a
whopping 12.62 times more frequently than applications from whites. Citibank denied
Latinos 7.5 times more frequently than whites. This is much, much worse than other lenders
in this MSA: the denial rate disparities for the industry as a whole in 2002 were 2.66 for
African Americans, and 1.87 for Latinos. Citibank's much higher-than-aggregate denial rate
disparities are certainly not explained by any greater-than-normal outreach with
normal-priced credit to African Americans or Latinos. For these three groups, the
aggregate made 8.1% of its loans to African Americans, and 20.9% to Latinos. For Citibank,
the figures were both lower: 4.8% of loans to African Americans, and 11.6% to Latinos...
In 2002 in the Los Angeles MSA for conventional home purchase
loans, Citibank (Citibank FSB and CitiMortgage together) denied loan applications from
African Americans 4.43 times more frequently than applications from whites. Citibank
denied Latinos 5.67 times more frequently than whites. This is much worse than other
lenders in this MSA: the denial rate disparities for the industry as a whole in 2002 were
1.95 for African Americans, and 1.62 for Latinos. As in Oakland, Citibank's
higher-than-aggregate denial rate disparities are not explained by any greater-than-normal
outreach with normal-priced credit to African Americans or Latinos. In 2002 in this MSA,
Citibank made 357 conventional home purchase loans to whites, only 21 to African
Americans, and only 122 to Latinos. For the record, the aggregate industry in this MSA in
2002 made 6619 such loans to African Americans, 28,391 to Latinos, and 54,916 to whites.
For these three groups, the aggregate made 7.4% of its loans to African Americans, and
31.6% to Latinos. For Citibank, the figures were notably lower: 4.2% of loans to African
Americans, and 24.4% to Latinos.
California: land now of the Terminator,once the
headquarters of Bank of America;
world's sixth largest economy and its celluloid dream-space, to which Jack Bender with his
daughter flees, burning rubber and more ways than one... In and around that commercial
soap box, Los Angeles, here are some CitiFinancials:
4215 Atlantic Avenue, Long Beach, CA 90807 - 562-426-5941
14408 E Whittier Boulevard, Whittier, CA 90605 - 562-698-7966
12031 Firestone Boulevard, Norwalk, CA 90650 - 562-863-4795
7808 Florence Avenue, Downey, CA 90240 - 562-927-2177
6253 Atlantic Avenue, Bell, CA 90201 - 323-771-2707 A bit further
south:
2278 East Lincoln Avenue, Anaheim, CA 92806 - 714-535-2247
13771 Newport Avenue, Tustin, CA 92780 - 714-734-9454
10130 Warner Avenue, Fountain Valley, CA 92708 - 714-964-8389
Then all the way to the Mexican border and beyond...
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Colorado
Colorado Department of Law
New predatory lending regulations are effective in Colorado on January 1,
2003 - click here
for the guidelines, published by the Colorado Attorney General; also, 2003 Session Laws,
Chapter 295. On the preemption front, currently state-regulated (and
subprime-lending) Chase Manhattan
Mortgage Corporation is trying to convert its ten offices in Colorado into branches of
a federal savings bank, Chase FSB, to escape state laws... Meanwhile, Colorado is another
battleground with Wells Fargo Financial,
see "Wells Fargo Accused of Predatory Lending," Denver Post, July 29,
2003, and "Wells Fargo Accused of Unfair Lending," Rocky Mountain News, July 29,
2003, Pg. 6B. Here's four CitiFinancials
around Denver:
98 Wadsworth Boulevard, Lakewood, CO 80226 - 303-235-0673
650 S. Wadsworth Boulevard, Lakewood, CO 80226 - 303-727-8302
7450 West 52nd Avenue, Arvada, CO 80002 - 303-420-4191
334 South Chambers Road, Aurora, CO 80017 - 303-745-3230
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Connecticut
State Mortgage bank Regulator:
Connecticut
Department of Banking
The Connecticut Abusive Home Loan Lending Practices Act became effective on
October 10, 2001... The Banking Commissioner has sued Wachovia -- but then (Nov. 2003)
sought to deny a FOIA fee waiver. ICP appealed:
Dear Commissioner Burke, et al.:
On behalf of the non-profit public interest organization Inner City
Press/Community on the Move and its members and affiliates, and the Fair Finance Watch
(collectively, "ICP"), this supplements two [FOIA] letters ICP has recently
submitted to you... Earlier today I spoke with Don Kitt of your office, who indicated a
non-favorable response to ICP's request for a fee waiver. For your information, numerous
other states' banking regulators routinely grant ICP FOIA fee waivers, as do each of the
federal regulators. The Connecticut statute (further discussed below) is substantially
similar to those of other states which have granted ICP fee waivers. We point, for
example, to. Conn. Gen. Stat. § 1-212(d), providing for fee waivers if disclosure
benefits the general welfare. Annexed hereto is a fee waiver grant to ICP, from Maryland,
under precisely this standard. ICP has also been granted fee waivers by state agencies in
such states as Missouri (attached) Wisconsin, North Carolina, Kansas, Texas (attached),
and, significantly, by the Federal Trade Commission (the "FTC"). ICP was granted
a fee waiver by the FTC with regard inter alia to complaints in the FTC's
possession against CitiFinancial,
with which the FTC announced a predatory lending settlement in September 2002. FTC FOIA
Request No. 2003-23, letter granting fee waiver annexed hereto. We would be surprised,
including in light of your litigation with Wachovia and its mortgage company, if your
Office consciously decided to be less transparent, and more difficult for consumer and
public interest organizations to obtain documents from, than your federal counterparts...
Connecticut, at least as to FOIA, is not a city on the hill. Although some
document withholdings, including about predatory lending, do get resolved:
Dear Mr. Hennick [and others at the Connecticut Freedom of Information
Commission]
Hello. This responds to your message of October 28, 2003, and Assistant
Attorney General Cobb's letter of October 24, 2003, and the attachments thereto [regarding
FIC # 2003 - 088 - Inner City Press v. Attorney General]. At your suggestion, on
October 3, 2003, we limited the scope of the documents, responsive to the Jan. 10, 2003,
request made by Inner City Press / Fair Finance Watch ("ICP"), which we most
wanted. Under cover letter dated October 24, AAG Cobb sent copies of a number of consumer
complaints against Household
International, represented that ICP now has "all documents in the possession of
this Office concerning 'how and why the scope of the predatory lending settlement with
Household was limited'" -- that is, AG Blumenthal's December 9, 2002 response to
ICP's request that the settlement's scope be expanded to include loans Household makes
through brokers, and e-mails among some of the AGs' offices. That these are the only
responsive documents is troubling to ICP -- but the FOIC may not be the best venue in
which to pursue this substantive policy, rather than FOI / transparency, issue.
AAG Cobb's letter also states:
"Pursuant to your request for clarification... in accordance with
paragraph 40 of the consent judgment entered into between Household and the States, this
Office is only obligated to notify Household of any FOIA requests for documents that were
either provided to the States by Household, or otherwise contain Household's proprietary
information that would be exempt from disclosure... as confidential commercial or
financial information."
We appreciate the "clarification," and accept it in a sense
(that is, that this is how the AG's Office will implement the consent judgments) -- but
that is not what the consent judgment says; even as partially quoted by AAG Cobb,
it provide for notifying Household of any requests "relative to... the negotiation of
the Agreement in Principle of this Consent Judgment," etc. -- i.e., requests
regarding the Attorneys General's communications, regardless of whether the communications
contain Household's proprietary commercial or financial information. We still think this
violates the letter and spirit of the FOI laws, and encourage the AGs office to modify
these provisions of the agreement with Household. It has, however, been explained to us
that the FOIC is not the venue in which this could be accomplished. Accordingly, and in
light of the FOIC's (voice-mail recorded) statement of lack of resources, and in light of
the AG's Office's diminishing intransigence, including on fee waivers and
question-answering, once AAG Susan Quinn Cobb was assigned to this matter, ICP hereby
confirms that no FOIC hearing on this appeal is necessary, on Nov. 18 (as it was
re-scheduled), or otherwise.
Not for nothing is ICP called The Peacemaker... In the
Bridgeport, Connecticut MSA for refinance loans, Citibank (Citibank FSB and CitiMortgage
together) denied loan applications from African Americans 5.23 times more frequently than
applications from whites. Citibank denied Latinos 6.28 times more frequently than whites.
This is much worse than other lenders in this MSA: the denial rate disparities for the
industry as a whole in 2002 were 3.05 for African Americans, and 2.59 for Latinos...
Here's just three of the CitiFinancials
in Connecticut:
656 New Haven Avenue, Derby, CT 6418 - 203-734-1646
321 Boston Post Road, Milford, CT 6460 - 203-783-9977
1040 Barnum Avenue, Stratford, CT 6614 - 203-385-8512
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Delaware
State Mortgage bank Regulator:
Delaware Office of the State
Bank Commissioner
Given the flocking of corporations, water-craft and credit
card companies to Delaware, ICP has an ongoing Delaware Watch, click here to view... On the preemption
front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its three offices in Delaware (Dover, Newark and Dehoboth Beach) into
branches of a federal savings bank, Chase FSB, to escape state laws. On October 30, 2003,
the state banking commissioner approved -- in part because
Chase FSB would be based in Delaware... The state's lucky to have advocates, less lucky to have an insurance commissioner
who's elected, and who takes campaign contributions from the industry, including Household and Citigroup... Meanwhile, state agencies
claim that Delaware's FOIA is only
for state residents - something about to be challenged. Developing... Here's just two of
the CitiFinancials in Delaware;
these are in Wilmington:
3505 Silverside Road, Wilmington, DE 19810 - 302-478-8070
4541 Kirkwood Hghwy, Wilmington, DE 19808 - 302-994-5721
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District of Columbia
State Mortgage bank Regulator:
District of Columbia Office of
Banking & Financial Institutions
The DC Home Loan Protection Act became effective March 6, 2002; there's also the
regulation, Title 26A of the DC Code, Chapter 20 of 2002. This is governmental
ground-zero, and base of NCRC, and yet the predators run
wild. See, for example, Hargraves v. Capitol City Mortgage Corp. (D.D.C.), the summary
and/or a DOJ amicus
brief... In 2002 in the Washington DC MSA for conventional home purchase
loans, Citibank (Citibank FSB and CitiMortgage together) denied loan applications from
African Americans 5.67 times more frequently than applications from whites. Citibank
denied Latinos 3.03 times more frequently than whites. This is much worse than other
lenders in this MSA: the denial rate disparities for the industry as a whole in 2002 were
3.04 for African Americans, and 2.38 for Latinos. For refinance loans in this MSA in 2002,
Citibank denied applications from African Americans 4.38 times more frequently than
applications from whites. This is much worse than other lenders in this MSA: the
comparable denial rate disparities for the industry as a whole in 2002 were 3.06 for
African Americans... Here are sample CitiFinancials,
one above and one below DC:
13486 New Hampshire Avenue, Silver Spring, MD 20904 - 301-622-6503
7219 Commerce Street, Springfield, VA 22150 - 703-866-4950
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Florida
State Mortgage bank Regulator:
Florida Department of Banking
& Finance
The Florida Fair Lending Act, formerly known as Senate Bill 2262,
"provides legislative findings; specifies prohibited acts re high-cost home loans;
specifies required disclosures for high-cost home loans; requires lenders of high-cost
home loans to provide notice to borrowers prior to taking foreclosure actions; allows
borrower to cure default; provides that lender who violates this act forfeits interest in
high-cost home loan; " etc.. Effective Oct. 2, 2002, its main purpose is to preempt
all municipalities' and counties' anti-predatory lending legislation...
Among various Florida campaigns, there are these, of predatory lending,
redlining, and even money-laundering: "Group
Targets Meritage Loan Practices," by Mark Gordon, Florida Times-Union
(Jacksonville), January 15, 2002, Pg. F1; "SunTrust
buy challenged: Bronx jeer: NYC group questions minority lending, terrorist accounts in
Florida," Orlando Business Journal, December 10, 2001
Despite hoopla about Florida's open records law, and the availability of autopsy
photos of crashed NASCAR drivers, ICP found the Florida Attorney General's Office to be
among the least responsive:
Dear Assistant AG Mary Ann Clark, Attorney General Crist, and FOI Officer:
On behalf of the Inner City Press/Community on the Move and its
members, and of the Fair Finance Watch (collectively, "ICP"), this regards and
appeals from Assistant Attorney General Clark's Jan. 27, 2003, letter purporting to
unilaterally extend the time to provide records responsive to ICP's Jan. 10, 2003, formal
request for records related to your Office's recent Settlement with Household
International, Inc. ("Household"), etc.. After a 17-day delay, we are told that
the Office of Civil Rights "will notify you of our response in a timely
fashion." But this non-responsive response is already untimely. For your information,
numerous other states' offices of the attorney general have already provided responsive
documents, including summaries of complaints against Household, and copies of their
communications with Household. For the reasons set forth below, ICP is troubled by your
Office's delay, and intuits that it may be attributable to the highly-questionable
agreement to privatize public records that is contained in some states' December 2002
settlement with Household. Along with the already-delayed records we requested on Jan. 10,
2003, we ask to be provided with copies of any and all communications between your Office
and Household regarding requests for Settlement-related information, and with an
explanation of how Chapter 119, Florida Statutes, is not violated by the concluding
sections of your Office's settlement agreement with Household.
The context of ICP's request, in brief, is that Household has been
charged in all fifty states, including Florida, with predatory lending, has entered a
settlement that many consumers' organizations including FFW contend is too limited, and
has now proposed to be acquired by the London-based Hongkong Shanghai Banking Corporation
("HSBC"). It is in the public interest to disclose the specifics of any and all
complaints against Household (and, for comparison's sake, certain of its peers) in
Florida, and to disclose the specifics of the Settlement in Florida.
On Dec. 3 and Dec. 9, 2002, ICP/FFW asked your Office to consider
the ramifications of the Nov. 14 proposal by Household be to acquired by HSBC Holdings plc
("HSBC") prior to finalizing the settlement. On Dec. 9, 2002, AAG Clark wrote to
ICP that " You raise important questions, which I believe are best addressed in the
context of state and federal regulatory proceedings related to approval of that
transaction."
As stated in our Jan. 10, 2003, request, we need these records in
connection with the "state and federal regulatory proceedings" to which AAG
Clark referred. On Dec. 18, 2002, AAG Clark responded to ICP's Dec. 9, 2002, letter,
stating that "The Florida Attorney General shares your concern for consumers and
appreciates hearing your thoughts regarding this settlement. On Friday, December 13, 2002
this Office and representatives of Household submitted a Consent Decree to the
Court...". Now the Consent Decrees are being used by HSBC as a basis on which its
applications to acquire Household should be approved, without any public hearings, and
your Office has already delayed 17 days and counting in providing any documents about the
settlement. This is why the already 17-day delay is galling. This letter should be
considered an appeal; it should be considered by the ultimate decision-maker at your
Office on record requests under Chapter 119, Florida Statutes.
To expedite matters, we note that Fla. Stat. § 119.07(3)(l)(1)
only allows (while not requiring) withholding of records "prepared by an agency
attorney... which reflects a mental impression, conclusion, litigation strategy, or legal
theory of the attorney or the agency... until the conclusion of the litigation or
adversarial administrative proceedings." Emphasis added. The Household litigation /
proceeding has concluded (see supra) -- the responsive records must be released.
But they never were... Here's just three of the CitiFinancials in Florida, these in
Miami:
8223 W. Flagler Street, Miami, FL 33144 - 305-262-4670
5352 West 16th Avenue, Hialeah, FL 33012 - 305-820-0270
7508 SW 117th Avenue, Miami, FL 33183 - 305-598-0018
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Georgia
State Mortgage bank Regulator:
Georgia Department of
Banking & Finance
This was the locus of showdown, because democracy (and the state legislature)
and the subprime lenders, including Chase
Manhattan, which is trying to convert its twelve offices in Georgia into branches
of a federal savings bank, Chase FSB, to escape state laws... The rating agencies,
Standard & Poor's and Fitch, conspired to
overturn legislation by threatening to refuse to rate pools of loans made in the state.
HB 1361, October 2002, preempted all municipalities' and county's legislation (for
example, Tlanta's Ordinance 01-O-0843 and 01-O1488, and DeKalb County's Predatory Lending
Ordinance of 2001. "How does it feel," some asked Georgians, "to be treated
with a Third World country?"
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Hawaii
State Mortgage bank Regulator:
Hawaii Department of
Commerce and Consumer Affairs
Introduced on the same day - Feb. 10, 2003 -- were HB 374 - the
:Hawaii Home Loan Protection Act to protect the homes and equity of individual
borrowers," and HB 1438 -
(prohibiting mortgage brokers from engaging in predatory lending practices)...
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Idaho
State Mortgage bank Regulator:
Idaho Department of
Finance
Idaho, or at least its Attorney General's Office, shamelessly accommodated
Household in late 2002, allowing Household to jettison its subprime credit card-lending
Orchard Bank, to Panhandle State Bank, connoting either change-begging or pancakes.
ICP commented -- see, "Group Challenging Purchase by Panhandle: Complaint
Seeks Review of Banks' Lending Practices," The Spokesman-Review (Spokane, WA),
November 27, 2002 -- but the Idaho regulator hauled off and approved the sale, while the
Idaho attorney general's office withheld virtually all documents about the settlement with
Household... Click here to view
HB 28, "A Bill to Amend the Licensing Practices For Mortgage Brokers Or Mortgage
Bankers."
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Illinois
State Mortgage bank Regulator:
Illinois Office of Banks &
Real Estate
On August 20, 2003, the High Risk Home Loan Act became law. Click here
for the text of SB 1784 / PL 93-0561, in pdf format (together, as enacted, they are Public
Act 93-0561); click here for an
analysis. There were also Cook County Ordinance 240684 of 2001 and Chicago Ordinance
SO2000-2145. On the preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its 18 offices in Illinois into branches of a federal savings bank,
Chase FSB, to escape state laws...
Of the windy city, what's not to like? Certainly not Woodstock... But Bank One N.A. (IL), in the
Chicago MSA in 2002 for home purchase loans, denied 75% of African Americans' application,
and less than one percent of (over 100) applications from whites... In 2002
in the Chicago MSA for conventional home purchase loans, Citibank (Citibank FSB and
CitiMortgage together) denied loan applications from African Americans 4.23 times more
frequently than applications from whites. Citibank denied Latinos 3.74 times more
frequently than whites. This is worse than other lenders in this MSA: the denial rate
disparities for the industry as a whole in 2002 were 3.83 for African Americans, and 2.62
for Latinos... Here's just three of the CitiFinancials in Illinois: Chicago and
lovely Oak Park:
6500 Irving Park Road, Chicago, IL 60634 - 773-283-4200
5533 West Cermak Road, Cicero, IL 60804 - 708-652-4435
1119 Lake Street, Oak Park, IL 60301 - 708-386-6272
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Indiana
State Mortgage bank Regulator:
Indiana Department of Financial
Institutions
Home of Conseco, which bought the subprime lender Greentree then blew up. Click here to
view Senate Bill 478, concerning among other things predatory lending. Inner City
Press appealed the Indiana AG's denial of access to Household-related documents to the
state's Public Access Counselor, resulting in this decision (html).
On the preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its five offices in Indiana into branches of a federal savings bank,
Chase FSB, to escape state laws...
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Iowa
State Mortgage bank Regulator:
Iowa Division of Banking
Headquarters of Wells Fargo Financial, which shook the taxpayers down for
corporate welfare and "incentives" in 2003. Surprisingly unfriendly on
FOIA, too, at least the state AG's Office, on fees:
Dear Special Assistant Attorney General William Brauch:
Thank you for your January 28, 2003, letter responding to (though in large part
denying) the Public Records Act request I submitted on Jan. 10, 2003, on behalf of Inner
City Press/Community on the Move and the Fair Finance Watch ("ICP"). You state
among other things that "records reflecting any consideration [y]our office may have
given to revisiting the Agreement reached in October following HSBC's announcement of the
proposed acquisition of Household" would "not be open records pursuant to Iowa
public records law," and that "[t]here are no records of communications between
[y]our office and representatives of HSBC." You in essence deny our fee-waiver
request, stating that your "resources, like those of most states, are stretched very
thin." You ask us to narrow the scope of the one request in our Jan. 10 letter to
which you state that you will provide responsive records. While this letter will
narrow ICP's request, due to the impending expiration of the comment and review periods on
the proposal by HSBC Holdings plc to acquire Household, this is also an appeal.
ICP sent virtually identical public records / freedom of information
requests to a number of other Attorney General's Offices; ICP has already begun to receive
responsive documents, including copies of complaints, correspondence with Household, etc.,
under fee waivers as a non-profit public interest organization. The multi-state settlement
of charges of predatory real estate lending (through Household's HFC and Beneficial
branches) is a matter of public concern; we reiterate our request for a fee waiver and for
timely (and incremental) production of the requested records. To expedite this, ICP's
request for consumer complaints is narrowed herein: for Household, back to January 1, 1999
(the time frame of your Office's Restitution Agreement with Household); for CitiFinancial
and American General, back to January 1, 2000, as you suggest.
It is in the public interest to disclose the specifics of any and all
complaints against Household (and, for comparison's sake, certain of its peers) in Iowa,
and to disclose the specifics and background of Household's finalized Settlement in Iowa.
For your information, the Federal Trade Commission has granted ICP's fee waiver request
with regard to documents related to the FTC's recent predatory lending settlement with
Citigroup -- we would be troubled if obtaining records related to Household's settlement
with the states (including Iowa) proved to be significantly more difficult and expensive.
Portions of our substantive appeal are made with reference to a Dec. 13,
2002, conference call with Ms. Kathleen Keest of your Office and with a staff member of
the Office of the Washington State Attorney General .Regarding communications with HSBC,
during the Dec. 13 conference call the question arose of whether the states, including
your Office, would seek to expand the scope of the injunctive relief in light of
Household's proposal to be acquired by HSBC (and in light of the analysis in the third
item into which you've divided our request). Ms. Keest of your Office chided ICP for
assuming that the states (including your Office) had not made inquiries with Household or
HSBC to this effect. We are requesting any and all records in this regard; it is in the
public interest to release them, regardless of the (questionable) terms of the Consent
Judgements with Household, which appear to us to inappropriately privatize the public
records / freedom of information laws... ICP is extremely concerned that Household
International not be given any veto-rights -- or even notice -- of ICP's requests, above,
that do not involve records submitted to your Office by Household. For example, your
Office's communications with other non-Household parties are public records, regarding
which no private corporation is entitled to advance notice of requests or release. It
would be a perversion of consumer protection if, by "settling on the cheap" (see
above, esp. your Item 3 and <www.wa.gov/ago/householdfinance/faq.htm>,
Household became even more insulated for public scrutiny that other lenders. Accordingly,
we ask you to notify Household, if at all, of only those portions of our now-clarified
request which involve documents submitted to your Office by Household, and that are
explicitly covered by the notice provisions of your Office's Consent Judgment with
Household.
But in Iowa and in other states, Household still gets notice of any request
concerning in any way their predatory lending negotiations, whether or not the requested
documents were submitted by Household. Government in the sunshine?
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Kansas
State Mortgage bank Regulator:
Kansas Office of State Bank
Commissioner
On the preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its three offices in Kansas (two in Wichita and one in Overland Park)
into branches of a federal savings bank, Chase FSB, to escape state laws...ICP presented (Household) predatory lending exhibits
to the Kansas Attorney General's office:
Dear Assistant Attorney General McCabria, Consumer Protection Division:
Thank you for your Jan. 23 response to the Kansas Open Records Act
(hereinbelow, "FOIA") request I submitted earlier this month on behalf of Inner
City Press/Community on the Move and the Fair Finance Watch ("ICP"). While ICP
disagrees with certain of the implicit denials of access contained in your letter, and
hereinbelow appeals therefrom, we appreciated your prompt provision of the Consent
Judgment, and the Petition for Approval thereof. Beyond appealing from the withholding of
other responsive documents, another purpose of this letter is to submit to your Office
documents reflecting Household's practices even since it entered into the Consent
Judgments
We wish to bring to your attention Household's position that it does not
have to comply even with the Injunctive Relief in the Consent Judgments until Dec. 31,
2003. In the public interest, we would appreciate being informed if that is your Office's
reading of the Consent Judgement, specifically Paragraph 29 thereof. As you will see from
the attached exhibits, it is our contention that Household is not in compliance with the
spirit, and even the letter, of the Consent Judgments.
Annexed hereto as ICP Exhibit 1 is a form, faxed on Jan. 8, 2003 from
"HFC Lending" in Tampa, Florida to "Household" in Orlando, Florida
which is Household's "Side Loan Matrix." It directs Household account executives
to make "Side Loans" at interest rates between 18% and 21.90%. As recounted by
Household CFO David Schoenholz in an Oct. 11, 2002 conference call announcing the
agreement in principle, "I also want to talk about the impact of best practices in
the agreement on the sales volume. The agreement only relates to our real estate volume.
There's really nothing explicitly in it that should reduce volume. We previously decided
to discontinue selling secured side loans at the time of closing."
Annexed hereto as ICP Exhibit 2 is a Dec. 20, 2002 (that is,
post-Settlement) version of Household's Real Estate Checklist, which among other things
contains a box to fill out about the "Side Loan." This form clearly relates to
the Settlement: the middle column concerns the "Borrowers' Benefits Test," but,
significantly, requires less demonstrable benefits-to-the-borrower for refinancing one of
Household's own loans.
And yet the Settlement was not expanded, then or since...
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Kentucky
State Mortgage bank Regulator:
Kentucky Department of
Financial Institutions
HB 287, enacted as Acts Ch. 64 of 2003, concerns predatory lending -- the rating
agencies S&P and Fitch
don't like the law, refused to rate mortgage backed securities involving Kentucky
properties. Also, Kentucky's AG's Office circled the wagons to protect Household
International -- so ICP appealed:
Dear Attorney General Chandler, and Assistant Attorney General Harold J. Turner:
On behalf of the Inner City Press/Community on the Move and its
members, and of the Fair Finance Watch (collectively, "ICP"), this is an appeal
from Assistant Attorney General Turner's Feb. 10, 2003, letter (the "Denial")
partially denying access to records responsive to ICP's Jan. 10, 2003, request for records
related to your Office's recent Settlement with Household International, Inc.
("Household"), and denying ICP's request for a fee waiver. This is a formal
appeal under both KRS 61.880(2) and (4)... Other states' Attorney General's Offices have
provided us with certain inter- and intra-agency communications, and with certain of their
communications with Household (which they've deemed not covered by the identical
confidentiality provisions of their Consent Judgments, see below, and with memos
from the investigation of Household, including one the provides this description of
Household's practices:
"The use of a large range of discount points on the GFE is misleading to
consumers. HFC's claims that borrowers had a 'choice' of rates and discount points has
proven to be false.. A significant number of consumers from across the country have
complained that they were promised an approximate 7% rate when the rate was far greater
(11% to 14%... HFC's practice is to hard sell insurance products. These practices break
down into four categories: i) aggressive sales tactics, ii) inclusion of insurance without
customer knowledge, iii) making borrowers believe insurance is a requirement, and iv)
forgery of signatures on acceptance documents...
HFC has charged excessive and unconscionable fees including unlawful increases
to charges by third party providers (e.g. title report fees)... HFC has routinely made
loans to borrowers in which there is no tangible benefit. A consistent practices appears
to be the requirement of a high rate second mortgage behind a high rate first mortgage
that leaves the borrower in a far worse position than before they transacted business with
HFC... The characteristics of HFC's home equity line of credit are those of a closed end,
rather than open end. The result is the avoidance of required RESPA and TILA
disclosures... Numerous occurrences of failure to make GFE and TIL disclosure have been
noted... Loan-to-values in excess of 100% are intended to lock borrowers into loans with
principal amounts so high compared with the value of the borrowers' homes that the
borrowers are unable to refinance with another lender. Because these loans are under
collateralized, where these loans go into foreclosure there will almost certainly be a
deficiency... Household has engaged in the practice of mailing 'live' checks to potential
borrowers... These live check loans are marketing tools and persons who case the 'live'
checks are placed on a 'hot list' for 'target practice' and are aggressively marketed to
consolidate the live-check loan with the consumer's other credit obligations in a home
equity loan with a slightly smaller interest rate but a much larger principal balance
secured by the borrowers' residences."
Suffice it to say that not all of these practices were addressed or
reformed by the Settlements or by your Office's Consent Judgment with Household.
Nor have these practices since been addressed...
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Louisiana
State Mortgage bank Regulator:
Louisiana Office of
Financial Institutions
Here's
a social initiative in New Orleans to combat predatory lending. Much exhortation: House
Resolution 103 asks the Office
of Financial Institutions to promulgate rules and regulation to increase public
awareness of predatory lending practices. These can be found, for example, at
offices of CitiFinancial, Household, Wells and American General... Meanwhile House Bill
817, which would require expanded disclosures on high cost loans, remains bottled up in
the Committee on Commerce, or dead, depending who you ask... On the preemption front,
currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its eleven offices in Louisiana into branches of a federal savings
bank, Chase FSB, to escape state laws...Here's just three of the CitiFinancials in Louisiana:
8309 W Judge Perez Dr, Chalmette, LA 70043 - 504-276-6330
3501 N. Causeway Boulevard, Metairie, LA 70002 - 504-837-8980
601 Terry Parkway, Gretna, LA 70056 - 504-362-3923
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Maine
State Mortgage bank Regulator:
Maine
Department of Professional & Financial Regulation - Office of Consumer Credit
Regulation
Maine
Department of Professional & Financial Regulation
When you pass a weak law (like Maine's LD 494 --
"An Act To Enhance Consumer Protections in Relation to Certain Mortgages" --
later S&P pats you on the head, saying it will continue
to rate "structure finance transactions" in your state...
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Maryland
State Mortgage bank Regulator:
Maryland Division of
Financial Regulation
Senate Bill 574 and House Bill 864 died and were withdrawn. Subsequently, the
same Maryland Commissioner who ruled on (and approved) HSBC's applications to acquire Household,
Mary Louise Preis, left less than a year later, going to work for CitiFinancial... On the
preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its 11 offices in Maryland into branches of a federal savings bank,
Chase FSB, to escape state laws... ICP's Maryland campaigns have included T.
Rowe Price Thrift Application Challenge (“N.Y. Consumer Group Opposed T. Rowe
Price Plan for Thrift,” Baltimore (and Washington) Business Journals)... In the
Baltimore MSA, Citibank (Citibank FSB and CitiMortgage together) denied loan applications
from African Americans 3.80 times more frequently than applications from whites, higher
than the aggregate's disparity (3.27). Here's just three of the CitiFinancials in Maryland - these are
in Baltimore, CitiFi's HQ:
6630 Security Boulevard, Baltimore, MD 21207 - 410-944-5090
6714 Ritchie Highway, Glen Burnie, MD 21061 - 410-761-5120
7676 Belair Road, Baltimore, MD 21236 - 410-882-9640
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Massachusetts
State Mortgage bank Regulator:
Massachusetts Division of Banks
Here's a good proposal: a bill "to establish community reinvestment
obligations for mortgage lenders," SB 4.
Also, the anti-predatory lending regulations at 209 CMR 40.00 et seq. of 2000.
On the preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its eight offices in Massachusetts into branches of a federal savings
bank, Chase FSB, to escape state laws... The Division of Banks holds hearings -- ICP attended one in
September 2003 -- but rarely follows-up. Shawmut, BayBanks, Bank of Boston -- where
did they go? See, e.g., “Fleet, BankBoston Plan to
Lend $14.6 Billion For Low-Income, Small-Business Loans,” by John Hechinger, Wall
Street Journal, June 28, 1999, Pg. A6. Here's just three of the CitiFinancials in Massachusetts:
1598 Hancock Street, Quincy, MA 2169 - 617-479-6850
Rte 114 300 Andover Street, Peabody, MA 1960 - 978-538-9215
500 Providence Highway, Norwood, MA 2062 - 781-769-3436
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Michigan
State Mortgage bank Regulator:
Michigan Financial
Institutions Bureau
Concerning the drafting, industry lobbying against, and redrafting of Detroit's
Anti-Predatory Lending Ordinance, click here
for a summary, here for
full text, both in pdf format. The Mayor vetoed it two days after Christmas, 2002.
On the preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its 11 offices in Michigan into branches of a federal savings bank,
Chase FSB, to escape state laws. In the Detroit MSA in 2002 CMMC denied the refinance
applications of African Americans 2.58 times more frequently than whites; in the Benton
Harbor MSA, CMMC denied the refinance applications of African Americans 2.36 times more
frequently than whites... ICP's work in the Motor City goes back to at least 1995 -- see,
e.g., "Group Says NBD's Loan Record Should Void Merger," by Joel J. Smith,
Detroit News, October 3, 1995 -- and gave rise to and ICP Detroit Watch Report.
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Minnesota
State Mortgage bank Regulator:
Minnesota Department of
Commerce
Here's
an attempt to combat the marketing of predatory lenders in the Twin Cities area.
The proposed Minnesota Home Loan Protection Act of 2003 was referred to the Committee on
Commerce and Utilities, where it essentially died (offically, it was "laid
over"). On the preemption front, currently state-regulated (and
subprime-lending) Chase Manhattan
Mortgage Corporation is trying to convert its six offices in Minnesota into branches
of a federal savings bank, Chase FSB, to escape state laws... Minneapolis, historically,
was the headquarters of Norwest, which bought finance companies, including Puerto
Rico-based Island Finance. Under Norwest, Island Finance opened a storefront in the South Bronx, charging everyone who
walked in 25% interest, without even checking people's credit histories. Pricing by
risk?
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Mississippi
State Mortgage bank Regulator:
Mississippi Department of
Banking and Consumer Finance
Stomping ground -- and we mean that literally -- of the old Deposit Guaranty
Bank, later bought by AmSouth. ICP raised issues (see, e.g., “Groups Say Loan Denial
Rates High,” The Tennessean (Nashville, TN), July 27, 1999), and soon AmSouth
settled with the Department of Justice, charges of discriminatory lending. See,
e.g., “Bank
settles 'unfair lending' claims,” The Tennessean, September 30, 1999. But AmSouth
has improved little since then...
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Missouri
State Mortgage bank Regulator:
Missouri
Division of Finance
Watchdogging is constant in the Show-Me State. NationsBank-Boatmen's ("NationsBank-Boatmen's
Merger," Associated Press, December 17, 1996), Shelter Mutual Insurance (see,
“Shelter Insurance Is Accused of Housing Bias: Company Denies N.Y. Group’s
Charges,” Jim Gallagher, St. Louis Post-Dispatch, October 7, 1998, Pg. C1), Citigroup
- Associates: ICP's fought 'em tooth and nail, filing suit in Jefferson City, walking the
downtown of St. Louis by The River, across to the other side, weedy East St. Louis...
Here's just three of the CitiFinancials
around St. Louis:
5450 South Lindbergh Blvd, St Louis, MO 63123 - 314-842-8626
511 Belt Line Road, Collinsville, IL 62234 - 618-344-5644
9815 Watson Road, St Louis, MO 63126 - 314-966-6020
On the preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its eight offices in Missouri into branches of a federal savings
bank, Chase FSB, to escape state laws...
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Montana
State Mortgage bank Regulator:
Montana
Division of Banking & Financial Institutions
Here's SB 402, the
Montana "Mortgage Broker and Loan Originator Licensing Act," signed by Gov. Judy
Martz in May 2003, in pdf format.
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Nebraska
State Mortgage bank Regulator:
Nebraska Department of Banking &
Finance
Here's LB 218,
signed by the Governor March 20, 2003. It prohibits predatory practices in the mortgage
loan industry and increases the authority of the Nebraska Department of Banking and
Finance to take action against persons engaged in predatory lending practices.
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Nevada
State Mortgage bank Regulator:
Nevada Department
of Business & Industry
Gold, sun, casinos and retirees -- this was the venue for a fight against Wells
Fargo (“Wells
Fargo Merger Target of Las Vegas, N.Y. Critics,” by Richard N. Velotta, Las Vegas
Sun, August 15, 2000), and soon after, against Citigroup - Associates: "Activist
Seeks Nevada Hearing," Las Vegas Sun, October 24, 2000. The anti-predatory
lending AB 284 was signed by the Governor on June 10, 2003, as Chapter 465, and became
effective on October 1, 2003. On the preemption front, currently state-regulated (and
subprime-lending) Chase Manhattan
Mortgage Corporation is trying to convert its two offices in Nevada (Reno, and 500 N.
Rainbow Blvd. in Las Vegas) into branches of a federal savings bank, Chase FSB, to escape
state laws... In the Las Vegas MSA in 2002 for conventional home purchase loans, Citibank
-- Citibank FSB and CitiMortgage together -- denied loan applications from African
Americans 3.57 times more frequently than applications from whites. Citibank denied
Latinos 1.98 times more frequently than whites. This is worse than other lenders in this
MSA: the denial rate disparities for the industry as a whole in 2002 were 1.99 for African
Americans, and 1.87 for Latinos...
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New Hampshire
State Mortgage bank Regulator:
New Hampshire Bank
Commissioner's Office
Here ICP fought KeyBank, while it bought Champion Mortgage. We tip our cap
to the Granite State CRA Coalition... On the preemption front, currently state-regulated
(and subprime-lending) Chase
Manhattan Mortgage Corporation is trying to convert its two offices in New Hampshire
(Portsmouth, and 1750 Elm St. in Manchester) into branches of a federal savings bank,
Chase FSB, to escape state laws...
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New Jersey
State Mortgage bank Regulator:
New Jersey Department
of Banking & Insurance
An ever-shifting, late-passed law, AB 75, slated to go into effect on November 27,
2003, was subject to much rating agency sniping; there's also the loss of all big banks
headquartered in the state, and almost non-functioning FOIA regime. Still we love Trenton,
Camden, Jersey City and Newark too -- having seen the First Fidelity Merger
Aftermath. In 2002 in the Newark MSA, for conventional home purchase
loans, Citibank (Citibank FSB and CitiMortgage together) denied loan applications from
African Americans a whopping 30.8 times more frequently than applications from whites.
Citibank denied Latinos 15.2 times more frequently than whites. This is much, much worse
than other lenders in this MSA: the denial rate disparities for the industry as a whole in
2002 were 3.43 for African Americans, and 2.33 for Latinos. Citibank's
higher-than-aggregate denial rate disparities are certainly not explained by any
greater-than-normal outreach with normal-priced credit to African Americans or Latinos.
For these three groups, the aggregate made 10.0% of its loans to African Americans, and
10.3% to Latinos. For Citibank, the figures were 4.8% of loans to African Americans, and
4.8% to Latinos...
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New Mexico
State Mortgage bank Regulator:
New Mexico
Financial Institutions Division
Ah, Nuevo Mexico, venue of fights against NationsBank - Boatmen's (see, "NationsBank-Boatmen's
Merger," Associated Press, December 17, 1996), and NationsBank buying Montgomery.
Thereafter forgotten by NationsBank-turned Bank of America... On January 8, 2003, the
Santa Fe city council passed Resolution 2003-4, calling for a state anti-predatory lending
law; on April 11, 2003, SB 449, the "Home Loan Protection Act," was signed
into law, becoming effective on the first day of 2004. Here's just five of the CitiFinancials in New Mexico:
11500 Menaul NE, Albuquerque, NM 87112 - 505-299-8789
6300 San Mateo Bv NE H-2, Albuquerque, NM 87109 - 505-821-1911
10131 Coors Road NW, Albuquerque, NM 87114 - 505-897-5075
3821 Menaul Boulevard NE, Albuquerque, NM 87110 - 505-888-9733
4056 Cerrillos Road, Santa Fe, NM 87507 - 505-471-2204
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New York
State Mortgage bank Regulator:
New York Banking Department
There's too much to say, in this space -- state laws (SB 11856 / Chapter 626 of
2002: for loans of $300,00 or less--
If the APR is 8 points higher on the first trust deed than yield on appropriate treasury
securities which have an equivalent term, or
if the APR is 9 points higher on a second trust deed that the yield on the treasury
securities which have an equivalent term, or
The total points and fees are more than 5%.predatory lending--
the NYC ordinance (67A of 2002, Local Law No. 36); and the NYBD's Part 41.
Headquarters to sleazy Citigroup and
Chase, five boroughs and eight
million stories. And those are just in New York City -- there's also Buffalo (see, e.g., “Acquisition
of Republic Could Face Court Challenge,” Business First Buffalo), Rochester,
Syracuse, Albany (for example, see "Complaint
Alleges Violations" [of NY Elections Law by Household], by Elizabeth Benjamin,
Albany Times Union, February 3, 2003).
In 2002 in the New York City Metropolitan Statistical Area (MSA), for
conventional home purchase loans, Citibank (Citibank, N.A. and CitiMortgage together)
denied loan applications from African Americans 4.67 times more frequently than
applications from whites. Citibank denied Latinos 3.17 times more frequently than whites.
This is much worse than other lenders in this MSA: the denial rate disparities for the
industry as a whole in 2002 were 1.89 for African Americans, and 1.68 for Latinos.
Citibank's higher-than-aggregate denial rate disparities are not
explained by any greater-than-normal outreach with normal-priced credit to African
Americans or Latinos. In 2002 in this MSA, Citibank made 3607 conventional home purchase
loans to whites, only 390 to African Americans, and 458 to Latinos. For the record, the
aggregate industry in this MSA in 2002 made 6567 such loans to African Americans, 6365 to
Latinos, and 34,336 to whites. For these three groups, the aggregate made 13.87% of its
loans to African Americans, and 13.47% to Latinos. For Citibank, the figures were much
lower: 8.7% of loans to African Americans, and 10.3% to Latinos. For more, click here for ICP's Weekly Bronx Report...
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North Carolina
State Mortgage bank Regulator:
North Carolina Commissioner
of Banks
More predatory lending action than you can shake a stick at -- a model statute
(click here to view,
in pdf format); competing studies;
home to Wachovia and B of A, and the smaller RBC Centura and BB&T. We like CRA-NC and the NC Fair Housing Center... See also.
as a blast from the past, "NationsBank
Merger Spurs Probe Requests," Triangle Business Journal. On the preemption
front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its 11 offices in North Carolina into branches of a federal savings
bank, Chase FSB, to escape state laws. In the Raleigh-Durham MSA in 2002, for conventional
home purchase loans, CMMC's denial rate disparity between African Americans and whites was
4.72; between Latinos and whites it was 7.09... In 2002 in the Raleigh-Durham NC MSA,
CitiMortgage denied the refinance loan applications from African Americans 4.88 times more
frequently than applications from whites, higher than the aggregate's disparity (3.29).
And in 2002 in the Charlotte NC MSA, CitiMortgage denied the refinance loan applications
from African Americans 5.56 times more frequently than applications from whites, higher
than the aggregate's disparity (2.36)...
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North Dakota
State Mortgage bank Regulator:
North Dakota Department of
Banking & Financial Institutions
Home to U.S. Bancorp's sleazy
credit card and home equity lending operation, and bad on FOIA to boot:
Dear Ms. Brocker, and Attorney General Stenehjem:
On behalf of the Inner City Press/Community on the Move and its
members, and of the Fair Finance Watch (collectively, "ICP"), this regards Ms.
Brocker's Jan. 15, 2003, constructive denial (the "Denial") of ICP's request,
under North Dakota's open records laws and otherwise, for records related to your Office's
recent Settlement with Household International, Inc. ("Household"), etc..
The context of ICP's request, in brief, is that Household has been
charged in all fifty states with predatory lending, has entered a settlement that many
consumers' organizations including FFW contend is too limited, and has now proposed to be
acquired by the London-based Hongkong Shanghai Banking Corporation ("HSBC"). It
is in the public interest to disclose the specifics of all complaints against Household
(and, for comparison's sake, certain of its peers) in North Dakota, and to disclose the
specifics of the Settlement in North Dakota. We note again that on Dec. 19, 2002,
Household issued a press release stating that "[a]ll 50 states and the District of
Columbia have agreed to participate in the program." For your information, numerous
Attorney General's Offices in other state have provided ICP, without cost, with copies of
complaints and other records in response to nearly identical Jan. 10, 2003, requests from
ICP.
The Denial provided not a single document. Rather, the Denial claims that
all responsive records would be exempt, and threatens to require an advance payment of
costs... The Denial states that "there were no Household branch offices in North
Dakota." That does not mean that Household International does not do business in
North Dakota, in a variety of ways -- including but not limited to through brokers, with
tax Refund Anticipation Loans (at interest rates over 100%) through H&R Block and
others, through credit cards including subprime / secured credit cards (under the brand
name "Orchard Bank") and/or credit insurance in connection with these
(collectively, the "Other Household Practices").
Household and HSBC are now claiming that the Settlement addresses
all of Household's allegedly predatory practices except RALs; so we are request documents
reflecting your Office's consideration of, and action on, the Other Household Practices.
But no such documents were every provided...
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Ohio
State Mortgage bank Regulator:
Ohio Department of Commerce
A history of fair housing beyond compare: Cleveland (Ordinances 372-02, 737-02,
45-03), Dayton (29990-01) and Toledo (click here
for August 2003 Toledo anti-predatory lending ordinance, No. 271-03). Ohio HB 386 purports
to preempt all municipalities' anti-predatory lending legislation.... On the
preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its nine offices in Ohio into branches of a federal savings bank,
Chase FSB, to escape state laws...ICP's fought Charter One, Bank One, Fifth Third (see, "Group Seeks to Stop Fifth
Third Merger," by John Nolan, Associated Press, Cincinnati Post, January 23,
2001) and PNC. In 2003,. ICP filed suit in Franklin County against HSBC-Household...
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Oklahoma
State Mortgage bank Regulator:
Oklahoma Department of
Consumer Credit
HB 1574, the Oklahoma Home Ownership and Equity Protection Act, , was approved
May 29, 2003. Here's a 2002 report
on predatory lending in Oklahoma. On the preemption front, currently state-regulated (and
subprime-lending) Chase Manhattan
Mortgage Corporation is trying to convert its four offices in Oklahoma into branches
of a federal savings bank, Chase FSB, to escape state laws... In 1999, ICP
opposed Wal-Mart, when they
tried to enter banking, in Oklahoma. See, e.g., "Wal-Mart’s
Banking Plans Opposed,” Tulsa (OK) World, July 24, 1999. More recently
(2002)
Dear Administrator Hardin, Commission on Consumer Credit
On behalf of the Inner City Press/Community on the Move and its members,
and of the Fair Finance Watch (collectively, "ICP"), this letter and the
exhibits hereto supplement ICP's Dec. 23, 2002, comment, which the Oklahoma State Banking
Department ("OSBD") forwarded to you Jan. 3, 2003 (see attached), opposing, and
still requesting a copy of records related to, the applications to your agency by HSBC
Holdings plc (along with its affiliates, "HSBC") to acquire the scandal-plagued
subprime lender Household International (along with its affiliates, including those doing
business in Oklahoma (collectively, "Household").
On Dec. 23, 2002, ICP submitted an initial comment opposing HSBC's
applications, to the OSBD (since HSBC's Dec. 20, 2002, preliminary proxy statement filed
with the SEC stated that HSBC would be applying for banking approval in Oklahoma). Having
heard nothing back (unlike from other states' regulators), on Jan. 3, 2003, ICP telephoned
the OSBD, which told me that the appropriate agency was the Oklahoma Commission on
Consumer Credit ("OCCC"). ICP telephoned the OCCC on Jan. 3 and left a message,
which has not been returned. Subsequently ICP received a copy of the letter from the
OSBD's Legal Counsel O. Dudley Gilbert, dated Jan. 3, forwarding ICP's comments to you.
Despite the fact that ICP has heard nothing back from your
Commission, ICP has received an update from an analyst, stating that as of Jan. 15, 2003,
"[t]he Oklahoma Department of Consumer Credit has not received the requested
affidavits from HSBC officials as of today. The ODCC still anticipates receiving the
documents "any day now," but will probably not be able to complete the
background checks and approve the transaction before the end of January as originally
anticipated. Approval will most likely occur in early-February, 2003, assuming no criminal
records are discovered among the HSBC officers under investigation."
If they weren't criminals then (pre-Household), they are now...
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Oregon
State Mortgage bank Regulator:
Oregon Department
of Consumer & Business Services
On the preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its 12 offices in Oregon into branches of a federal savings bank,
Chase FSB, to escape state laws...Here, HB 3088 got buried, and the state AG wants $2000
for documents about Household:
Dear Attorney General Hardy Myers, Assistant AG Drew Lianopoulos::
On behalf of the Inner City Press/Community on the Move and its members,
and of the Fair Finance Watch (collectively, "ICP"), this regards and appeals
from Assistant Attorney General Lianopoulos' Feb. 4, 2003, letter constructively denying
access to records responsive to ICP's Jan. 10, 2003, request, under the Oregon Public
Records Act, ORS 192.420, for records related to your Office's recent Settlement with
Household International, Inc. ("Household"), etc.. After a 25-day delay, we are
told that your Office proposes to charge $97 a hour for "Assistant Attorney General
review" for documents regarding Household which other states' Offices of the Attorney
General have provided to ICP faster, and for free. ICP's Jan. 10, 2003, letter explicitly
included a request for a waiver of fees (which numerous other states' Office of the
Attorney General have granted). Despite ORS 192.440(4), the constructive Denial does not
even mention ICP's request in this regard. This is an appeal, including under ORS
192.440(5).
The proposed charge over $2,000 (mostly for AAG review) strikes us
as abusive and designed to discourage public review and oversight of your Office's
settlement with Household, which for some reason was limited only to Household's real
estate loans, and even for those, only to branch-originated loans. ICP is troubled by both
this ludicrous proposed charge, and by the initial delay in response (and proposed further
delay of 45 days in providing documents). ICP intuits that these may be attributable to
the highly-questionable agreement to privatize public records that is contained in some
states' December 2002 settlement with Household. Along with the already-delayed records we
requested on Jan. 10, 2003 (the request is narrowed below), we ask to be provided with
copies of any and all communications between your Office and Household regarding requests
for Settlement-related information, and with an explanation of how Oregon's public records
law is not violated by the concluding sections of your Office's settlement agreement with
Household.
The context of ICP's request, in brief, is that Household has been
charged in all fifty states, including Oregon, with predatory lending, has entered a
settlement that many consumers' organizations including ICP contend is too limited, and
has now proposed to be acquired by the London-based Hongkong Shanghai Banking Corporation
("HSBC"). It is in the public interest to disclose the specifics of any and all
complaints against Household (and, for comparison's sake, certain of its peers) in Oregon,
and to disclose the specifics of the Settlement in Oregon. We note this context inter alia
in light of Gray v. Salem-Keizer School District, 139 Or.App. 556, 912 P.2d 938
(1996), holding that the purpose and context of the request should be taken into
consideration in determining how the records' release or confidentiality may affect the
public interest.
As stated in our Jan. 10, 2003, request, we need these records in
connection with state and federal regulatory proceedings on HSBC's proposal to acquire
Household. The Consent Decrees are being used by HSBC as a basis on which its applications
to acquire Household should be approved, without any public hearings, and your Office has
already delayed 25 days and counting in providing any documents about the settlement. This
is why the already 25-day delay is galling. This letter should be considered an appeal; it
should be considered by the ultimate decision-maker at your Office on public record
requests, and that you forward this appeal, and your response, to the Secretary of State,
as the Public Records Administrator, under ORS 192.015. We are particularly troubled by
the abusive proposed charge given the Office of Attorney General's role in considering
appeals of other agencies' Public Record Act denials.
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Pennsylvania
State Mortgage bank Regulator:
Pennsylvania Department of
Banking
The Philadelphia ordinance was preempted by HB 1703. On the preemption
front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its seven offices in Pennsylvania into branches of a federal savings
bank, Chase FSB, to escape state laws... In 2002 in the Philadelphia MSA, CitiMortgage
denied the conventional home purchase loan applications from African Americans 4.55 times
more frequently than applications from whites, higher than the aggregate's disparity
(3.11)... Meanwhile, AG Mike Fisher, and the departments of banking and insurance,
claim that their Right-to-Know Act is only for Pennsylvania citizens -- making PA one of
the few states to do this, like Delaware (more
on this anon). Here was one of our PA requests, mid-2003:
Dear Deputy Secretary Hernandez-Velez, Right-to-Know Law officer:
On behalf of the Inner City Press/Community on the Move, and in my personal /
individual capacity (collectively referred to hereinbelow as "ICP"), this is a
request under 65 P.S. §§66.1-66.9 (the "Right-to-Know Law") for records in
your agency's possession or control regarding American Business Financial Services, Inc.
and its affiliates ("ABFI"), and, separately and for comparison's sake,
regarding Household International and its affiliates ("Household;" ABFI and
Household are collectively referred to hereinbelow as the "Companies"). We are
requesting copies of all non-exempt communications between the Department and the
Companies, from May 1, 2000, to the date of your response. We are also requesting copies
of all records reflecting or relating to consumer complaints against the Companies.
To assist you in collecting the responsive records, we note that your
agency's Web site, via
<www.banking.state.pa.us/Banking/Banking/InstListResults.asp>, lists the following
ABFI subsidiaries as licensees:
American Business Mortgage Services, Inc. First Mortgage Banker P 1021, Bala
Cynwyd PA 19004
American Business Mortgage Services, Inc. Secondary Mortgage Lender P 0181, Bala Cynwyd PA
19004
HomeAmerican Credit, Inc. First Mortgage Banker P 1136, Bala Cynwyd PA 19004
HomeAmerican Credit, Inc. Secondary Mortgage Lender P 1853, Bala Cynwyd PA 19004
HomeAmerican Consumer Discount Company Consumer Discount Company P 2982, Bala
Cynwyd PA 19004-9837
On May 15, 2003, ABFI issued a press release on the Business Wire service
stating among other things that
"American Business Financial Services, Inc. (NASDAQ:ABFI) today announced
that its consumer mortgage subsidiary, Home American Credit, Inc., doing business as
Upland Mortgage, plans to significantly expand its lending program in nine markets,
beginning in May 2003. The expansion, expected to phase in over the next several months,
will include: Arkansas, Colorado, Idaho, Montana, New Mexico, North Dakota, Oklahoma,
South Dakota, and Wyoming. Upland Mortgage is presently licensed or qualified to originate
home equity loans in 44 states. According to ABFI Chairman and Chief Executive Officer,
Anthony J. Santilli, 'This expansion is demonstrative of much more than our ability to
expand our business geographically. It is really a testament to the value we bring to
those American consumers in every part of the country who are often ignored by more
traditional lenders.'"
Also for your information, a June 13, 2003, SEC filing on form 8K, ABFI
disclosed that the U.S. Justice Department on May 14, 2003, requested via subpoena from
ABFI all "loan files with respect to mortgage loan transactions in which the Company
entered into a forbearance agreement with a borrower rather than pursue foreclosure or
other contract remedies."
The list of Household International (now HSBC) affiliates licensed in
Pennsylvania is more extensive:
Household Realty Corporation Secondary Mortgage Lender P 0105, Harrisburg PA
Household Finance Consumer Discount Company P 1653, Harrisburg PA
Household Retail Services, Inc. Sales Finance Company P 1135, Wood Dale IL
HSBC Bank USA Sales Finance Company P 2136
HSBC Mortgage Corporation (USA), P 0079, Upper Darby PA
HSBC Mortgage Corporation (USA) 2ndary Mortgage Lender P 1980, Upper Darby PA
HSBC Bank USA Sales Finance Company P 2136
HSBC Mortgage Corporation (USA) Partially Exempt B 0079.001, Depew NY
HSBC Mortgage Corporation (USA) Partially Exempt B 0079.002, Fairfax VA
Beneficial Consumer Discount Company 2ndary Mortgage Lender P 210, Harrisburg PA
Beneficial Consumer Discount Company P 1942, Harrisburg PA
Beneficial Mortgage Services First Mortgage Broker P 2872, Narberth PA
Beneficial Mortgage Services Secondary Mortgage Broker P 0941, Narberth PA
Beneficial Savings Bank Sales Finance Company P 0294, Philadelphia PA 19106
What a roster of rogues... Here's a few more, with street address: five CitiFinancials each, around
Philadelphia, Pittsburgh, then Harrisburg:
1900 Grant Avenue, Philadelphia, PA 19115 - 215-856-9405
2110 Marlton Pike E. Rte 70, Cherry Hill, NJ 8003 - 856-424-2227
1404 US Hwy 130 North, Cinnaminson, NJ 8077 - 856-786-7399
1009 Pontiac Road, Drexel Hill, PA 190264816 - 610-789-6009
Route 130 & Browning Road, Brooklawn, NJ 8030 - 856-742-5130
3613 Library Road, Pittsburgh, PA 15234 - 412-881-6915
1063 Washington Avenue, Carnegie, PA 15106 - 412-429-2036
4136 Library Road, Castle Shannon, PA 15234 - 412-344-2780
300 Curry Hollow Road, Pleasant Hills, PA 15236 - 412-655-3870
7380 McKnight Road, Pittsburgh, PA 15237 - 412-367-9292
3843 Union Deposit Road, Harrisburg, PA 17109 - 717-564-8899
3401 Hartzdale Drive #126, Camp Hill, PA 17011 - 717-737-0431
6520 Carlisle Pike, Mechanicsburg, PA 17050 - 717-795-8102
1 Valley Street, Carlisle, PA 17013 - 717-249-9566
6049 Allentown Boulevard, Harrisburg, PA 17112 - 717-541-8633
Predatory lending in Pennsylvnia - for residents only...
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Rhode Island
State Mortgage bank Regulator:
Rhode
Island Banking Division
They lost the headquarters of Fleet, the Providence television show, and
now everything else. On the preemption front, currently state-regulated (and
subprime-lending) Chase Manhattan
Mortgage Corporation is trying to convert its office in Rhode Island (300 Centerville
Road in Warwick) into a branch of a federal savings bank, Chase FSB, to escape state
laws... From here, a bureaucrat wrote that Household had done nothing wrong:
Dear Attorney General Lynch:
On behalf of the Inner City Press/Community on the Move and its members,
and of the Fair Finance Watch (collectively, "ICP"), this is an appeal, pursuant
to. R.I. Gen. Laws § 38-2-8(b), from Special Assistant Attorney General Field's
Feb. 14, 2003, letter (the "Denial") partially denying access to records
responsive to ICP's Jan. 10, 2003, request for records related to your Office's recent
Settlement with Household International, Inc. ("Household"), etc..
The Denial divides ICP's request into seven categories of records, and specifies
some records that are being withheld. However, we contend that that are additional
responsive records which are being withheld. Annexed hereto are certain documents, to be
considered in connection with this appeal, which have been provided to ICP by the Offices
of Attorney General of other states, including some with open records laws far narrower
than the Rhode Island Access to Public Records Act ("APRA"). Also, as a Rhode
Island-specific example, consider this e-mail
From: [ ] @riag.state.ri.us
Subject: RE: Predatory Lending Follow-up
Date: Tue, 10 Dec 2002 15:49:59 -0500
...the AG's office is not doing anything about this matter. I don't mean to be
glib; we do not regulate banks in the AG's office, nor may we, since other state and
federal agencies do. It may be unhappy to contemplate, but complaints received in DBR
about HHF's actions do not violate any of DBR's banking laws, and our consumer protection
laws are not helpful here either. So you may wonder why we are included in the settlement
at all....RIers are getting relief primarily because of the resources in other states and
their stronger laws as they pertain to banking and consumer affairs.
Received: by ATTG3 with Internet Mail Service (5.5.2656.59) id <Y1CWXAHM>;
Tue, 10 Dec 2002 15:50:00 -0500 Message-ID:
<71C3777FAD7CD611B0ED0008C733BF905B6F1E@ATTG3>
That is simply an example, providing a basis for why ICP contends
that responsive records are being withheld, even beyond those enumerated in the Denial. In
connection with this appeal, a broader search of agency documents should take place
(including in light of the other documents annexed hereto). As to the enumerated withheld
documents, we specifically contest the withholding of the "letter of final
action" (Denial at 2), the Dec. 6, 2002, e-mail (id. at 1), and, most
absurdly, the "press release by Household." That document, like others, is
clearly already publicly available, eviscerating any basis to withhold it. We also
contest, and appeal from, the withholding of all records responsive to the first and
seventh of the categories into which the Denial divided our request.
We reiterate our request for expedition, and question whether the
confidentiality provisions of your Consent Judgment with Household should be voided as
contrary to public policy and applicable open government laws -- including but not limited
to APRA -- in that, as applied, they result in Household being shielded, even more than
other subprime lenders, from public scrutiny. For example, Household should have no right
to be notified of, or to object to, disclosure of the type of inter- and intra-agency
communications annexing hereto, and that have been released to ICP by other states'
Offices of the Attorney General.
For your information, as recently as Feb. 14, 2003, HSBC has represented
to regulators that "[w]ith the exception of refund-anticipation loans... all of
the products and practices to which ICP refers were considered in connection
with or were the subject of the Settlement" (emphasis added;
this quote is from HSBC's 2/14/03 submission to the Delaware Insurance Department). As
should be clear, HSBC is arguing that since your Office, and the multi-state group, did
not act on, for example, Household's non-branch real estate loans, and other non-real
estate loans, this means that these Household's practices have been "considered"
and vetted, and implicitly given a seal of approval, by your Office and the multi-state
group.
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South Carolina
State Mortgage bank Regulator:
South Carolina Department
of Consumer Affairs
Here's SB 438 / Act 42 - "High-Cost And Consumer Home Loans Act"
(click here,
in pdf) -- and, in html, a (lenders') lawyer's article
about the law. It becomes effective January 1, 2004. On the preemption front,
currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its three offices in South Carolina (Greenville, Piedmont and
Columbia) into branches of a federal savings bank, Chase FSB, to escape state laws...
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South Dakota
State Mortgage bank Regulator:
South Dakota Department of Commerce & Regulation
In fighting Citi-Associates,
the SD regulator held a
hearing; at the 11th hour, Citigroup tried to prevent ICP for participating:
Dear Mr. Duncan, Dept. of Commerce and Regulation
On the evening of October 9, 2000, Columbus Day, at 11 p.m., I was
informed by a staff member of Inner City Press/Community on the Move ("ICP")
that counsel to Citigroup, Inc. had just faxed a letter to ICP's office, purporting to
oppose ICP's party status for the October 10, 2000 hearing in the above-captioned matter.
As you know, ICP's request for party status was granted, by letter
dated October 2, 2000. In our phone conversation on October 5, you agreed to allow ICP to
participate as a full party, by telephone, at the hearing on October 10 at 10 a.m. CST.
There should be no need for ICP to respond to Citigroup's counsel's eleventh hour
opposition. However, having reviewed Citigroup's counsel's letter, and its one-sided (and
misleading) presentation of case law, at 2, ICP is submitting this response.
Citigroup's counsel devotes the longest paragraph of the letter to a
one-sided presentation of federal appeals court litigation under the Community
Reinvestment Act ("CRA") -- which is not the statute at issue here. In any
event, note that New York State courts have held that ICP has standing, to seek judicial
review of decisions by the New York State banking regulator. See, e.g., Inner
City Press / Community on the Move v. New York State Banking Bd., 170 Misc. 2d 684,
657 N.Y.S.2d 275, 1996 N.Y. Misc. LEXIS 397, which held inter alia that
Petitioner Inner City Press meet the test [for standing]... Banking Law Section
142... sets forth certain criteria that the Banking Board must consider in determining
whether or not to approve a merger application, including... 'primarily, the public
interest and the needs and convenience thereof."... The court finds that petitioners
have legally cognizable interests that are encompassed by such statutes... Petitioners
also are the appropriate organization to represent the interests of low to moderate income
predominantly minority neighborhoods... For all of these reasons, petitioners have
standing to maintain this action.
I look forward to participating in the hearing...
And did.
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Tennessee
State Mortgage bank Regulator:
Hard to get documents, not the height of compliance. On October 30, 2003, the
proposed "Tennessee Home Loan Protection Act" was introduced - click here (in pdf
format). Previously, HB 21, the "Tennessee Predatory Lending Prevention Act,"
died in the Utilities and Banking Subcommittee... On the preemption front, currently
state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its three offices in Tennessee (Hermitage, Brentwood and Nashville)
into branches of a federal savings bank, Chase FSB, to escape state laws...And
here's just five of the CitiFinancials in and around Knoxville, TN:
6733 Clinton Highway, Knoxville, TN 37912 - 865-947-5655
2605-D Adair Drive, Knoxville, TN 37918 - 865-688-4996
8805 Kingston Pike, Knoxville West, TN 37923 - 865-693-0482
1078 Hunter's Crossing Dr, Alcoa, TN 37701 - 865-983-5913
150 North Seven Oaks Dr, Knoxville, TN 37922 - 865-539-4891
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Texas
State Mortgage bank Regulator:
Texas Savings and Loan
Department
Texas Office of Consumer
Credit Commissioner
Ground Zero of independent predators, especially in Irving. Here's
the beginning of an anti-predatory lending initiative in San Antonio. On the
preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its 14 offices in Texas into branches of a federal savings bank,
Chase FSB, to escape state laws. In the Dallas MSA in 2002, CMMC denied conventional
home purchase loan applications from African Americans 2.4 times more frequently than
those from whites.. ICP in 2003 won a FOIA decision
(click here);
here's pending applications.
SB 1067 passed -- but requires an amendment to the state's constitution to become
effective...
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Utah
State Mortgage bank Regulator:
Utah Department of Financial
Institutions
Utah Real
Estate Division
On the preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its two offices in Utah (South Ogden, and 2180 S. 1300 East in Salt
Lake City) into branches of a federal savings bank, Chase FSB, to escape state laws...Home
of the predatory servicer Fairbanks Capital (controlled by the PMI Group - which ICP
raised, see, e.g., "Financial Guaranty Insurance Co. Sale to PMI Group
Sparks Protest," by Bonnie McGeer, Asset Securitization Report, September 15, 2003);
bad experience with defeatist from the Utah AG's Office:
On Jan. 10, 2003, ICP requested such records from the Utah Office of the
Attorney General (the "AG's Office"). Under cover letter dated Jan. 14, 2003
(the "First Denial"), Mr. Wayne Klein of the AG's Office sent ICP certain very
limited records; on Jan. 27-28, 2003, ICP faxed a letter and exhibits in response: in
essence, an appeal.
Mr. Klein's Feb. 5, 2003, letter (the "Second Denial") inter
alia sought to impose fees on even the initial response, and denied access to numerous
records which we believe should be released, both because they are not exempt from
disclosure, and in the public interest. We are concerned that some of the withholdings are
made in light of the Confidentiality provisions of the AG's Office's settlement with
Household; in connection with this appeal, we ask the State Records Committee to
consider whether paragraph 39 of the Consent Judgment is consistent with Utah law
(including but not limited to Utah Code Ann. § 63-2-201(2), which provides that
"[a]ll records are public unless otherwise expressly provided by statute"), with
principles of open government, or whether it should be voided or modified as contrary to
public policy...
To put this appeal in context, we note a letter by Mr. Klein, to a
complainant whose name has apparently been redacted, stating inter alia that
"Utah does not have laws making these practices illegal and there is no agency that
oversees companies like [Household]. The Division of Consumer Protection has no authority
over home loans. The Division of Real Estate has limited powers to require a license of
mortgage companies, but does not regulate their practices. The Department of Financial
Institutions has little authority over first mortgage loans. In sum, the legislature has
not found a need to impose regulatory oversight over this industry." But see,
the Salt Lake Tribune of February 10, 2003, at B3, reporting that House Bill 189, "to
impose consumer-friendly restrictions on so-called 'predatory lenders' got the go-ahead
Friday from House members." While the AG's Office may still technically claim that
"the legislature has not found a need to impose regulatory oversight" on
high-rate, allegedly predatory mortgage lenders, the knee-jerk rejection of a good-faith
appeal, such as the Third Denial (and the Second Denial's attempt to begin imposing fees
because Inner City Press continued to seek records regarding the AG's Office's settlement
with Household), is inconsistent with law (see above), with open government and
with the public interest.
For the reasons set forth in the letter and exhibits we faxed to Mr. Klein, the AG's
Office's lead lawyer in the Household Settlement, on Jan. 27-28, ICP is concerned that the
Household Settlement is too narrow (being limited to branch-originated real estate loans);
we are additionally concerned that Household may already be violating the spirit and/or
letter of the Settlement, and that HSBC might move even further in this regard.
And they have...And HB 249 died on the vine...
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Vermont
State Mortgage bank Regulator:
Vermont Department of Banking,
Insurance, Securities and Health Care Administration
Here's an Anti-Predatory Lending bill that was introduced in the Vermont Senate,
BX 230 (click here,
in pdf format). SB 83 was referred to the Senate Finance Committe back on February 11,
2003...
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Virginia
State Mortgage bank Regulator:
Virginia
Bureau of Financial Institutions
Among other things, Pat Robertson's base (click here for ICP's Report on Pat's
ill-conceived proposed partnership with Bank of Scotland). Senate Bill 1103, based on
recommendations by the Virginia Housing Study Commissioner, was signed by the Governor on
March 16, 2003. On the preemption front, currently state-regulated (and
subprime-lending) Chase Manhattan
Mortgage Corporation is trying to convert its 12 offices in Virginia into branches of
a federal savings bank, Chase FSB, to escape state laws...
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Washington
State Mortgage bank Regulator:
Washington Department of Financial
Institutions
On the preemption front, currently state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its ten offices in Washington State into branches of a federal
savings bank, Chase FSB, to escape state laws. ICP wrote in, and the Department of
Financial Institutions' legal counsel, Joe Vincent, then explained his understanding that
CMMC is a subsidiary of Chase Manhattan Bank USA N.A. (actually, it isn't) -- and then
stated, "I wish to express on behalf of our Director, Helen Howell, appreciation for
your concerns... It is not, however, within the purview of the DFI to speculate on or
officially comment on the application of CMMC to become a federal savings bank, a matter
solely within the jurisdiction of the OTS and FDIC." Ms. Howell similar
prevaricated with regard to Wells Fargo...
Supposedly the Washington AG's Office led the fight against Household -- they
structured a settlement on the cheap and defended it in boiler plate letters distributed
to other states:
Dear Mr. Huey, Assistant Attorney General:
...While we have yet to receive a single documents from your Office in response
to our Jan. 10, 2003, request, we have been provided with some responsive documents by
other agencies to which we directed similar requests on Jan. 10, 2003. These include, for
example, a memorandum entitled "State of Washington Meeting with HFC, May 23,
2002" (see infra); a letter you wrote to Kathleen Curtin of Household on June
28, 2002; a seemingly related memorandum to Ms. Curtin, dated June 21, 2002, "Re:
Request for general information for July 9 meeting;" and an undated document entitled
"Summary of Relief Sought by Washington AGO CP Division Against Household
International, Inc.."
We remain surprised that your Office has not, to date, provided us
with any documents responsive to our Jan. 10 request. Your letter refers to file cabinets
full of complaints against Household -- but as soon as I was contacted by Ms. O'Hearne, I
limited ICP's request, as to complaint, to computer print-out summaries of such
complaints. That was on Jan. 22, but still not documents have been provided. On Feb. 14,
after I attempted to reach you by telephone, I received an e-mail from Daniel Owen of your
Office, stating "I received a copy of your letter dated January 22, 2003. You
mentioned Missouri granted your fee waver, what other states also granted your
waver?" Forty-four days after the submission of our records request, I listed other
states, and then re-emphasized the Jan. 22 narrowing of ICP's request:
we don't want the 30,000 pages provided in your Office's initial estimate. We
then waived our request for the actual complaints, and asked only for a computer generated
list. We were told that the complaints made up most of the 30,000 page estimate. But I've
just been told that the estimate may now be 30,000 to 50,000 pages, and that payment in
advance would be required.
I'm sensing some incongruity with other states' AG's Offices responses, ironic
in light of your Office's lead role in the settlement with Household and in light of AAG
Huey's Dec. 13, 2002, letter to ICP, stating that "You raise important questions,
which I believe are best addressed in the context of the state and federal regulatory
proceedings related to the approval" of HSBC's applications to acquire Household. We
were and are seeking these documents among other things to participate in those
proceeding; in those proceeding, HSBC has said that the Settlement addresses or considered
all of the Household issues we've raised, except tax Refund Anticipation Loans.
Our Jan. 10 records requests was intended to obtain documents to respond to this
HSBC / Household (mis-) representation of the settlement, but to date have received not a
single document from your Office. Outside of the public records process, we would like
(and have requested) for your Office and/or the multi-state group or the executive
committee thereof to make clear what the settlement considered and addressed and what it
doesn't.
We are concerned that the Confidentiality provisions of the Consent Judgment(s)
may be playing a role in your Office's delayed provision of responsive documents; we would
ask that you consider whether those confidentiality provisions (1) are consists with RCW
42.17.270, et seq., and (2) don't provide Household with an even greater shield
from accountability and public disclosure that other controversial subprime lenders. Many
states' FOI responses have cc-ed Household; some states have provided their communications
with Household regarding our request(s); I've now noticed a state cc-ing Mr. Huey on its
FOI response to ICP.
The further irony: we have obtained (at no cost), for example, AAG Huey's June
28, 2002, letter to Household's Kathleen Curtin, and a memo about a state of Washington
meeting with HFC on May 23, 2002. These are the type of documents we've been requesting
from your Office since Jan. 10; we sure hope to receive them soon.
The reference above to another state's Attorney General's Office cc-ing
you on an interim FOI response is to Ohio, which also has yet to provide us with any of
the responsive documents. You've cc-ed your Feb. 18 letter to Household's John Blenke; I'm
left wondering if that's your reading of the Consent Judgment, that "notice"
must be provided to Household of any communication regarding the company, its practices or
its proposed new owner. If so, this certainly is a "right" that other subprime
lenders don't enjoy. We are concerned that these and other confidentiality provisions of
the Consent Judgments will make it even more difficult to protect consumers from the
Household practices to which several of the documents we've obtained refer, but which are
not the subject matter of the Consent Judgments.
...Accordingly, we would ask that your Office, and/or the executive committee of
the multi-state group, respond to the above-quoted HSBC statements regarding "the
products and practices.[which] were considered in connection with or were the subject of
the Settlement," prior to the expiration of the review periods in any more of the
regulatory proceeding on HSBC's applications to acquire Household. We also ask that the
documents we've been requesting since Jan. 10, 2002 -- and which since Jan. 22 have not
included the underlying file cabinets full of complaints to which you refer -- be provided
as quickly as possible.
Ten months later, we still don't have the documents... Here's just
three of the CitiFinancials in
Washington State, these are around Seattle:
10708 5th Avenue NE, Seattle, WA 98125 - 206-365-9675
330 Southwest 43rd Street, Renton, WA 98055 - 425-251-8207
10408 Silverdale Way NW, Silverdale, WA 98383 - 360-308-0903
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West Virginia
State Mortgage bank Regulator:
West Virginia
Division of Banking - and W. Virginia Code
Mountain State Justice -- the (satellite TV dish) avengers...(Click here, c/o W. Virginia Legal
Services).
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Wisconsin
State Mortgage bank Regulator:
Wisconsin Department of Financial
Institutions
Another ICP venue - see, e.g., "Minorities Might
Pay Cost of Firstar Merger, Group Says," by Paul Gores, Milwaukee Journal
Sentinel, December 5, 2000, Pg. 3D; "Fed
Requests More Information on Banks' Minority Lending Practices," by Paul Schwab,
The Business Journal of Milwaukee, December 15, 2000. On the preemption front, currently
state-regulated (and subprime-lending) Chase Manhattan Mortgage Corporation
is trying to convert its three offices in Wisconsin (two in Brookfield, and 4050 W.
Spencer St. in Appleton) into branches of a federal savings bank, Chase FSB, to escape
state laws...
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Wyoming
State Mortgage bank Regulator:
Wyoming
Division of Banking
ICP challenged Chase Manhattan and U.S. Trust of Wyoming, for breaking the law. Here's
a long decision.
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American Samoa - coming soon
State Mortgage bank Regulator:
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Guam - coming soon
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Puerto Rico
State Mortgage bank Regulator:
Puerto Rico Commissioner of
Financial Institutions - file
complaints
La Isla del Encanto -- and of Wells Fargo's high-cost Island
Finance...
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U.S. Virgin Islands
Department of Licensing and Consumer Affairs
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