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  • Federal Reserve's Letter To BNC Bancorp For Compliance and Other Info After FFW CRA Protest

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    Matthew Russell Lee
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    Federal Reserve Asks BNC for CRA Info, Withheld Like Goldman Sachs? By Matthew R. Lee NEW YORK, December 3 -- The lack of seriousness in US bank regulation expends from the relatively smaller of mid-sized to the largest banks, with Goldman Sachs the most recent example. A mid-sized bank Inner City Press / Fair Finance Watch is scrutinizing, based on its records, is BNC Bancorp, currently seeking to acquire Southcoast Financial in South Carolina and, prospectively, High Point Bank & Trust. There's a problem with this acquisitiveness: BNC is subject to to Compliance Order with the FDIC, which is rare, based on its fair lending record. Fair Finance Watch has raised to the Federal Reserve: In the Charleston MSA in 2014 for conventional home purchase loans, BNC made 173 such loans to whites and only SIX to African Americans, and none to Latinos. For refinance loans, it made 68 loans to whites and only ONE to an African American, while denying the applications of African Americans 3.94 times more frequently than those of whites. Southcoast in the Charleston MSA in 2014 for conventional home purchase loans made 136 such loans to whites and NONE to African Americans. For refinance loans, Southcase made 35 loans to whites and only TWO to African Americans. To combine these two banks would make them worse. In the Greenville MSA in 2013 for home purchase loans, BNC made 117 such loans to whites and only SIX to African Americans, and only seven to Latinos. For refinance loans, it made 31 loans to whites and only one to an African Americans and none to Latinos. BNC admits, as it must, that it is below-market in lending to African Americans, but paradoxically tries to use that the fact that it is subject to a compliance order as its defense to the Fed. To Fair Finance Watch, too. FFW asked to see, in writing, what are BNC's CRA plans going forward. BNC replied that it is "unable to share this with you. It is an internal document that is only shared with our Board of Directors and the FDIC (under the Order)." Now the Federal Reserve has asked BNC for, among other things, for information about its Community Reinvestment Act compliance, and consumer compliance more generally. Inner City Press is putting the Fed's December 2 Additional Information letter online, here. BNC is supposed to send a copy of its response, with this information it already declined to provide, to ICP / FFW. But will it try to withhold it? That seems to be the trend at and encouraged by the Federal Reserve. Goldman Sachs is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed, documents released to Inner City Press under the Freedom of Information Act (FOIA) show, is inappropriately bent on helping, including by closing its comment period. Now on December 2, Goldman Sachs has sent Inner City Press a heavily redacted copy of its submission to the Federal Reserve. Inner City Press has put it online, here, and immediately submitted this under FOIA: "This is a FOIA request for the entirety of the December 2 submission in connection with the 'Application by Goldman Sachs Bank USA for the Acquisition by Purchase and Assumption of Certain Deposit Liabilities and Certain Very Limited Non-Financial Assets of GE Capital Bank,' of which a heavily redacted copy was sent to Inner City Press, as a timely commented, by Goldman Sachs' outside counsel past 10 pm on December 2. On the cover letter, referring to a “Confidential Application,” much is redacted; four exhibits are withheld in full. Given this, ICP contests and is hereby request all of this information. On Response 1, after the words “Strategic Plan,” there are heavy redactions. Later, Goldman Sachs tries to withhold even what is seeks to acquire. Exhibits A, B, C and D are withheld in full. ICP is requesting all of them." Inner City Press / Fair Finance Watch also immediately commented on this to th

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    Federal Reserve Asks BNC for CRA Info, Withheld Like Goldman Sachs? By Matthew R. Lee NEW YORK, December 3 -- The lack of seriousness in US bank regulation expends from the relatively smaller of mid-sized to the largest banks, with Goldman Sachs the most recent example. A mid-sized bank Inner City Press / Fair Finance Watch is scrutinizing, based on its records, is BNC Bancorp, currently seeking to acquire Southcoast Financial in South Carolina and, prospectively, High Point Bank & Trust. There's a problem with this acquisitiveness: BNC is subject to to Compliance Order with the FDIC, which is rare, based on its fair lending record. Fair Finance Watch has raised to the Federal Reserve: In the Charleston MSA in 2014 for conventional home purchase loans, BNC made 173 such loans to whites and only SIX to African Americans, and none to Latinos. For refinance loans, it made 68 loans to whites and only ONE to an African American, while denying the applications of African Americans 3.94 times more frequently than those of whites. Southcoast in the Charleston MSA in 2014 for conventional home purchase loans made 136 such loans to whites and NONE to African Americans. For refinance loans, Southcase made 35 loans to whites and only TWO to African Americans. To combine these two banks would make them worse. In the Greenville MSA in 2013 for home purchase loans, BNC made 117 such loans to whites and only SIX to African Americans, and only seven to Latinos. For refinance loans, it made 31 loans to whites and only one to an African Americans and none to Latinos. BNC admits, as it must, that it is below-market in lending to African Americans, but paradoxically tries to use that the fact that it is subject to a compliance order as its defense to the Fed. To Fair Finance Watch, too. FFW asked to see, in writing, what are BNC's CRA plans going forward. BNC replied that it is "unable to share this with you. It is an internal document that is only shared with our Board of Directors and the FDIC (under the Order)." Now the Federal Reserve has asked BNC for, among other things, for information about its Community Reinvestment Act compliance, and consumer compliance more generally. Inner City Press is putting the Fed's December 2 Additional Information letter online, here. BNC is supposed to send a copy of its response, with this information it already declined to provide, to ICP / FFW. But will it try to withhold it? That seems to be the trend at and encouraged by the Federal Reserve. Goldman Sachs is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed, documents released to Inner City Press under the Freedom of Information Act (FOIA) show, is inappropriately bent on helping, including by closing its comment period. Now on December 2, Goldman Sachs has sent Inner City Press a heavily redacted copy of its submission to the Federal Reserve. Inner City Press has put it online, here, and immediately submitted this under FOIA: "This is a FOIA request for the entirety of the December 2 submission in connection with the 'Application by Goldman Sachs Bank USA for the Acquisition by Purchase and Assumption of Certain Deposit Liabilities and Certain Very Limited Non-Financial Assets of GE Capital Bank,' of which a heavily redacted copy was sent to Inner City Press, as a timely commented, by Goldman Sachs' outside counsel past 10 pm on December 2. On the cover letter, referring to a “Confidential Application,” much is redacted; four exhibits are withheld in full. Given this, ICP contests and is hereby request all of this information. On Response 1, after the words “Strategic Plan,” there are heavy redactions. Later, Goldman Sachs tries to withhold even what is seeks to acquire. Exhibits A, B, C and D are withheld in full. ICP is requesting all of them." Inner City Press / Fair Finance Watch also immediately commented on this to th

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    Federal Reserve's Letter To BNC Bancorp For Compliance and Other Info After FFW CRA Protest

    Uploaded by

    Matthew Russell Lee
    Federal Reserve Asks BNC for CRA Info, Withheld Like Goldman Sachs? By Matthew R. Lee NEW YORK, December 3 -- The lack of seriousness in US bank regulation expends from the relatively smaller of mid-sized to the largest banks, with Goldman Sachs the most recent example. A mid-sized bank Inner City Press / Fair Finance Watch is scrutinizing, based on its records, is BNC Bancorp, currently seeking to acquire Southcoast Financial in South Carolina and, prospectively, High Point Bank & Trust. There's a problem with this acquisitiveness: BNC is subject to to Compliance Order with the FDIC, which is rare, based on its fair lending record. Fair Finance Watch has raised to the Federal Reserve: In the Charleston MSA in 2014 for conventional home purchase loans, BNC made 173 such loans to whites and only SIX to African Americans, and none to Latinos. For refinance loans, it made 68 loans to whites and only ONE to an African American, while denying the applications of African Americans 3.94 times more frequently than those of whites. Southcoast in the Charleston MSA in 2014 for conventional home purchase loans made 136 such loans to whites and NONE to African Americans. For refinance loans, Southcase made 35 loans to whites and only TWO to African Americans. To combine these two banks would make them worse. In the Greenville MSA in 2013 for home purchase loans, BNC made 117 such loans to whites and only SIX to African Americans, and only seven to Latinos. For refinance loans, it made 31 loans to whites and only one to an African Americans and none to Latinos. BNC admits, as it must, that it is below-market in lending to African Americans, but paradoxically tries to use that the fact that it is subject to a compliance order as its defense to the Fed. To Fair Finance Watch, too. FFW asked to see, in writing, what are BNC's CRA plans going forward. BNC replied that it is "unable to share this with you. It is an internal document that is only shared with our Board of Directors and the FDIC (under the Order)." Now the Federal Reserve has asked BNC for, among other things, for information about its Community Reinvestment Act compliance, and consumer compliance more generally. Inner City Press is putting the Fed's December 2 Additional Information letter online, here. BNC is supposed to send a copy of its response, with this information it already declined to provide, to ICP / FFW. But will it try to withhold it? That seems to be the trend at and encouraged by the Federal Reserve. Goldman Sachs is trying to speed through Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed, documents released to Inner City Press under the Freedom of Information Act (FOIA) show, is inappropriately bent on helping, including by closing its comment period. Now on December 2, Goldman Sachs has sent Inner City Press a heavily redacted copy of its submission to the Federal Reserve. Inner City Press has put it online, here, and immediately submitted this under FOIA: "This is a FOIA request for the entirety of the December 2 submission in connection with the 'Application by Goldman Sachs Bank USA for the Acquisition by Purchase and Assumption of Certain Deposit Liabilities and Certain Very Limited Non-Financial Assets of GE Capital Bank,' of which a heavily redacted copy was sent to Inner City Press, as a timely commented, by Goldman Sachs' outside counsel past 10 pm on December 2. On the cover letter, referring to a “Confidential Application,” much is redacted; four exhibits are withheld in full. Given this, ICP contests and is hereby request all of this information. On Response 1, after the words “Strategic Plan,” there are heavy redactions. Later, Goldman Sachs tries to withhold even what is seeks to acquire. Exhibits A, B, C and D are withheld in full. ICP is requesting all of them." Inner City Press / Fair Finance Watch also immediately commented on this to th

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    Boag of Governors oF THe Frperat Reserve System Wasiinatow, DC 20551 December 2, 2015 Brendan J. Thomas, Esq ‘Troutman Sanders LLP Bank of America Plaza £600 Peachtree Street NE, Suite $200 Allanta, Georgia 30308 Dear Mr. Thomas: This letter refers tothe application (“Application”), dated October 8, 2015, by BNC Bancorp (“BNC”), High Point, North Carolina, parent of Bank of North Carolina (BNC Bank”), Thomasville, North Carolina, to acquire Southeoast Financial ‘Corporation (“Southcoast), and its subsidiary, Southeoast Community Bank ‘CSoutlwosst Bank"), bol of Mount Pleasant, South Carolina, pursuant to section 3(@)3) of the Bank Holding Company Act of 1956, as amended. Based on staff's review of the Application and related sumissions, the following additional information is needed, Supporting documentation, as appropriate, should be provided, 1. With respect to the Agreement and Plan of Merger (“Merger Agreement”), dated August 14, 2015, by and between BNC and Southcoast, please provide the following: ‘a. A copy of the Disclosure Memorandum, described in section 3.1 of the Merger Agreement; bb. Any other exhibits, amendments, or related documents to the Merger ‘Agreement not already provided: and cc. With respect to Article IV, Section 4.9 of the Merger Agreement, specify the percentage of loans or extensions of credits made by Southcoast Bank in the last 12 months that were in excess of $1,000,000. 2. With respect to your submission, dated October 28, 2015, the following additional information is necded: 4 An update on the status of BNC’s recent stock offering i ‘on the gross and net proceeds of the offering; and Juding information b. Updated pro forma financial data as of September 30, 2015, to include parent company only, consolidated and bank only balance sheets, as well as capital calculations and applicable capital ratios, The data should reflect the recent acquisition of branches from CertusBank, N.A., Easley, South Carolina, and proceeds from the recent stock offering, 3. Please provide an updaie on BNC Bank's Community Reinvestment Act (“CRA”) activities since its Apri. 2014 CRA Performance Evaluation, and on Southeoast Bank's CRA activities since its January 2014 CRA Performance Evaluation, Include {n your response for each bank any significant CRA initiatives undertaken, particularly with respect to credit and deposit products and retail banking services targeted toward low- and moderate-income geographies and individuals () in its entire assessment area, and (i) for the portion of each bank’s operations in the Charleston and Greenville South Carolina Metropolitan Statistical Areas. In addition, provide information for each bank, as applicable, on community development Tending, investments, and services since its last evaluation period, including the total ‘number and dollar amount, and a brief description of each bank's most significant community developmest loans, investments, and services. 4. Discuss any pending litigation, including, but not limited to, that pertaining to ‘consumer protection laivs and regulations, against BNC Bank or Southeoast Bank, Please address your response to the undersigned within ten business days. If you hhave any questions regarting this letter, please contact Victoria Szybillo at (202) 475- (6325 or Amber Hay at (202) 973-6997, both of the Board’s Legal Division, Pat Grant at (202) 452-5214 of the Board's Division of Banking Supervision and Regulation, or Anthony Twuji at (202) 452-3254 of the Board’s Division of Consumer and Community ‘Affairs, Any information for which confidential treatment is desired should be so labeled and separately bound in accordance with section 261.15 of the Boards Rules Regarding Availabilty of Information, Please also send a copy of the public portion of your response tothe protestant. Sincerely, ‘on Stoloft Special Counsel co: Matthew R. Lee, Esq Inner City Press/Fair Finance Watch Richard D. Callicut I, President and Chief Executive Officer BNC Bancorp

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