COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary



“MAKE NO MISTAKE ABOUT IT, THE MEGA BANKS ARE PICKING UP STEAM CONTROLLING FINANCE, AND THUS CONTROLLING THE ECONOMY AND OUR FUTURE. We can only hope that the pattern of community banks and credit unions — filling in gaps left by the the large banks with the start-up of new bank — will offset the plan launched by the megabanks. It is a relentless push toward centralization of all banking functions and monopolizing the world of finance, controlling the purse strings of every man, woman and child for generations to come.” NEIL F GARFIELD, FORMER EDITOR OF SMARTBANKS NEWSLETTER FOR COMMUNITY BANKS AND CREDIT UNIONS

The entire economy is suffering because a few people on Wall Street are making sure the economy stifles — by refusing to to perform the task they are required to perform — providing easier, intelligent access to capital for innovation, new business start-ups, and expansion of existing small and medium sized businesses. The alternative is sitting right there in front of us but the people who can fix it are sitting on their hands. We don’t need more bank regulation at this point — that won’t save us (although it is a good idea to have a referee on the playing field) — we need the 7,000 banks and credit unions with 20,000+ branches all over the country to pick up the ball and run with it.

We have 7,000 community banks and credit unions here, unlike any other country. WHERE THE HELL ARE THEY? They have the exact same access to electronic and internet services at lower cost with the PRESENT ability to provide ALL the services a large bank can offer including free ATM use. They make better loans with lower default rates because the loan officer actually exists as a human being rather than a computer and has met the proposed borrower and the people who advise the borrower, including family, friends and professionals. The large banks could not be more despised than they are now by virtually everyone all over the world, including other bankers, central bankers and finance ministers.

Nothing new needs to be invented. The backbone (infrastructure) of payment processing, account processing, and money transfer is already there for the taking and protected by prior DOJ actions breaking up control of networks like MAC, NYCE, HONOR, VISA and MasterCard. There already exists associations of community banks and credit unions: WHAT ARE THEY DOING? THIS IS YOUR MOMENT TO SEIZE BACK MARKET SHARE IN A BIG WAY.

The whole issue of TBTF (Too Big To Fail) could be solved by free market forces if the smaller banks would take up the opportunity that is right in front of them. MidFirst Bank out of Oklahoma gets it — that bank is growing by leaps and bounds following this model. Others are doing it, but unless the industry as a whole adopts the mission of taking back market share, they will forever be dominated by the large banks who will dictate how much business goes to small banks and how much money they make.

While everyone is biting their nails hoping the next big failure of TBTF banks won’t hurt too much, the community bank presidents and boards should be making plans and launching them — using existing infrastructure to take back their local customers. Credit Unions who have taken the words “not for profit” a little too literally should be finally stepping forward and covering their overhead and putting money aside for reserves and loans that the large banks won’t give.



Until it closed its doors in December, the Ohio Savings Bank branch on North Moreland Boulevard was a neighborhood anchor in Cleveland, midway between the mansions of Shaker Heights and the ramshackle bungalows of the city’s east side. Now it sits boarded up, a victim not only of Cleveland’s economic troubles but also of a broader trend of bank branch closings that is falling more heavily on low- and moderate-income neighborhoods across the country.

In 2010, for the first time in 15 years, more bank branches closed than opened across the United States. An analysis of government data shows, however, that even as banks shut branches in poorer areas, they continued to expand in wealthier ones, despite decades of government regulations requiring financial institutions to meet the credit needs of poor and middle-class neighborhoods.

The number of bank branches fell to 98,517 in 2010, from 99,550 the previous year, a loss of nearly 1,000 locations, according to data compiled by the Federal Deposit Insurance Corporation.

Banks are expected to keep closing branches in the coming years, partly because of new technology and automation and partly because of the mortgage bust and the financial crisis of 2008. New regulations will also cut deeply into revenue, including restrictions on fees for overdraft protection — a major moneymaker on accounts aimed at lower-income customers. Yet the local branch remains a crucial part of the nation’s financial infrastructure, banking analysts say, even as more customers manage their accounts via the Internet and mobile phones.

“In a competitive environment, banks are cutting costs and closing branches, but there are social costs to that decision,” said Mark T. Williams, a banking expert at Boston University and a former bank examiner for the Federal Reserve. “When a branch gets pulled out of a low- or moderate-income neighborhood, it’s not as if those needs go away.”

Mr. Williams and other observers express concern that the vacuum will be filled by so-called predatory lenders, including check-cashing centers, payday loan providers and pawnshops. The F.D.I.C. estimates that roughly 30 million American households either have no bank account or rely on these more expensive alternatives to traditional banking.

The most recent wave of closures gathered steam after the financial crisis in 2008, as banks of all sizes staggered under the weight of bad home loans. In some cases, banks with heavy exposure to risky mortgage debt simply cut branches as part of a broader restructuring. In other cases, banking companies merged and closed branches to consolidate.

Whatever the cause, there were sharp disparities in how the closures played out from 2008 to 2010, according to a detailed analysis by The New York Times of data from SNL Financial, an information provider for the banking industry. Using data culled from the Federal Deposit Insurance Corporation and ESRI, a private geographic information firm, SNL matched up the location of closed branches with census data from the surrounding neighborhood.

In low-income areas, where the median household income was below $25,000, and in moderate-income areas, where the medium household income was between $25,000 and $50,000, the number of branches declined by 396 between 2008 and 2010. In neighborhoods where household income was above $100,000, by contrast, 82 branches were added during the same period.

“You don’t have to be a statistician to see that there’s a dual financial system in America, one for essentially middle- and high-income consumers, and another one for the people that can least afford it,” said John Taylor, president of the National Community Reinvestment Coalition, a group that advocates for expanding financial services in underserved communities.

“In those neighborhoods, you won’t see bank branches,” he added. “You’ll see buildings that used to be banks, surrounded by payday lenders and check cashers that cropped up.”

Wayne A. Abernathy, an executive vice president of the American Bankers Association, disputed Mr. Taylor’s conclusion, as well as the significance of the data.

“You need to look at the context,” he said. “We’re looking at a pool of more than 95,000 branches, and we’ve had several hundred banks fail, so what would be surprising is if no branches had closed.”

The Community Reinvestment Act, signed into law more than three decades ago in an effort to combat discrimination and encourage banks to serve local communities, requires financial institutions to notify federal regulators of branch closings. But legal experts say the federal watchdogs that are supposed to enforce the law have been timid.

“The C.R.A. has been a financial Maginot Line — weakly defended and quickly overrun,” said Raymond H. Brescia, a professor at Albany Law School. What’s more, Mr. Brescia said, while closing branches violates the spirit of the law, if not the letter, he could not recall a single example in which a bank was cited by regulators under the C.R.A. for branch closures in recent years. “The C.R.A leaves banks a lot of leeway,” he said, “and regulators have not wielded their power with much force.”

Even as more customers turn to online banking, said Kathleen Engel, a law professor at Suffolk University in Boston, the presence of brick-and-mortar branches encourages “a culture of savings,” beginning with passbook accounts for children and visits to the local bank. “If we lose branch banking in low- and moderate-income neighborhoods, banks stop being central to the culture in those communities,” said Ms. Engel, author of a new book, “The Subprime Virus: Reckless Credit, Regulatory Failure and Next Steps.”

Among individual financial institutions, especially those hit hard by the mortgage mess, the differences between rich and poor communities were especially marked.

Regions Financial, based in Birmingham, Ala., had 107 fewer branches serving low- and moderate-income neighborhoods in 2010 than it did in 2008. The company, which has yet to repay $3.5 billion in federal bailout money, shuttered just one branch in a high-income neighborhood, according to SNL Financial.

At Zions Bancorporation, a Utah lender battered by losses on commercial real estate loans, branches in low- and moderate-income neighborhoods dropped by 24, compared with a decrease of just one branch in an upper-income area. It still owes the federal government $1.4 billion in bailout money. A spokesman for Zions said the branch closings reflected a strategic move to exit all supermarket locations as well as merger-related consolidation, rather than a withdrawal from particular neighborhoods.

A similar trend is evident at some larger institutions. Bank of America closed 25 branches in moderate-income areas and opened 14 in the richest areas, according to the SNL data. Citigroup, whose branch network is smaller than Bank of America’s, closed two branches in the poorest areas and opened three in the wealthiest.

The head of Citigroup’s global consumer business, Manuel Medina-Mora, made no secret of his bank’s intention to focus on the wealthy in the country, telling a Wall Street investor conference in November that “in retail banking, we will focus our growth in the emergent affluent and affluent segments in major cities — exactly in line with our global consumer banking strategy.”

Comparisons for two other giants, Wells Fargo and JPMorgan Chase, are more difficult because of the addition of thousands of branches in all categories in 2008 as they absorbed Wachovia and Washington Mutual, both of which were pushed to the brink by mortgage losses. From 2009 to 2010, however, Wells closed 57 branches in low- and moderate-income neighborhoods, and shut 20 in upper-income census tracts.

JPMorgan Chase, which emerged from the turmoil of 2008 as the healthiest of the big banks, actually opened 11 branches in low- and moderate neighborhoods, while it closed one in the $100,000-plus communities.

A spokeswoman for Bank of America, Anne Pace, defended her company’s record, noting that more than one-third of its new branch openings in 2011 would be in low- and moderate-income communities.

Citigroup, Wells Fargo and Regions Financial disputed the statistics provided by SNL, arguing that the number of branches closed in low- and moderate-income neighborhoods was overstated. The three banks insisted they are committed to serving all customers and communities, regardless of the income level.

In Cleveland, the closing of the Ohio Savings branch in December was one more bit of fallout from the financial crisis, according to Chris Warren, the city’s chief of regional development.

A year earlier, New York Community Bancorp took over the assets of AmTrust Bank, now operating as Ohio Savings Bank in Ohio, after it was shut by the federal Office of Thrift Supervision. The F.D.I.C.’s deposit insurance fund took a $2 billion loss as a result of the closing. The North Moreland branch was the only one of Ohio Savings’ 29 branches in the state to close.

“This was their introduction of their approach to community investment in this city,” Mr. Warren said. “They closed down the only branch Ohio Savings had in a low-to-moderate-income, African-American neighborhood.”

A spokeswoman for New York Community Bank said the branch was closed only because the bank was unable to reach a new agreement on a lease. She said customers could choose other branches nearby, including an Ohio Savings branch 2.4 miles way.

That is little comfort to customers like Lucretia Clay, who manages a store nearby and lives within walking distance of the now-shuttered branch. “I’ve given that bank a lot of money over the years,” she said. “So they should be here in the community. I shouldn’t have to drive forever to go find them.”

Christopher Maag contributed reporting.

21 Responses

  1. Who is American Community Bank Group

    Is it Wells FArgo?

    American Community Bank Group incorporated and located in Minneapolis MN as a Bank Holding Company 1/30/1989 renamed 4/21/1994 to Americgroup Inc. and on 6/4/1996 moved to Sixth & Marquette Minneapolis MN. 10/31/1997 Amerigroup Inc was renamed to Norwest AMG Inc. 9/1/2000 Norwest AMG Inc was acquired by Well Fargo & Co. Last Report of Currency thru Norwest AMG Inc. under Wells Fargo & Co. RSSD ID 1120754 is 8/31/2000.

    Wells Fargo & CO. 1120754 Parent Financial Holding Company since 3/13/2000
    Wells Fargo Bank Arizona, National Association Phoenix AR a national bank.


    At American Community Bank, you really can have it all because we’re different than most banks. In fact, we believe we’re so unique that you’ll find it almost impossible to resist our brand of banking.

    American Community Bank is an independent, FDIC insured commercial bank that is locally owned and operated. We offer a broad range of financial services to individuals, professionals, business and non-profit organizations. We’re committed to being highly customer focused and community oriented – commitments that have defined us from the beginning.

    We were established on January 10, 2000 by a group of concerned local residents and business people. Our founders wanted to offer a refreshing alternative to our larger competitors who seemed to have little or no vested interest in their customers or the communities they served. Like many people, they had experienced first hand the confusion and uncertainty created by bank mergers, branch closings, resistance to approving loans, and the inability to speak to a banker with decision making authority.

    American Community Bank has changed all that. We have become the breath of fresh air envisioned by our founders. We have assembled a group of highly seasoned, relationship oriented local bankers dedicated to providing the personal attention and financial expertise you deserve. We’re easy to talk to and we’ll always know how to respond to your individual needs.

    So, whether you want to open an account to teach your child the value of saving money or you need a million dollar loan to relocate your business, we have it covered.

    Community Banking

  2. Banks are social institutions: that are given a special license to intermediate funds by “borrowing short” and “lending long”. They are not true businesses: as they do not meet the “Adam Smithian” criteria for the “perfectly competitive” enterprise.

    Because every bank’s books are composed of long-term assets (loans) funded by short-term liabilities (deposits), every bank is an intrinsically illiquid entity: solvent (perhaps) but illiquid.

    Thus – like the businesses of prostitution and insurance – we make banks closely regulated.

    We need to wake up to the fact that US Banks (and insurers) have a bad case of the clap.

  3. Another must read from Yves Smith. Anderson is Mers general counsel:

    Mr. Anderson said that he could not comment on the OCC investigation or actions but then went on to say that no administration would allow, nor would it allow a judge’s ruling, to threaten the legal standing of a MERS member to take a home. He pointed out that MERS has some relationship with 60% of the mortgages in the country worth in the trillions of dollars. In other words, in his opinion, regardless of the law or the findings of the OCC, MERS is too important because of the dollars associated with its operation to be allowed to be found to be acting illegally.

    In short, this man, who from his position as legal counsel for the party under investigation has inside knowledge of the OCC investigation, is confident that the government will do all it can in its power, regardless of the evidence, to assure that MERS and its members are allowed to proceed as they wish because of the potential financial costs.

  4. We must counter with informative and mass comments from our side.

    Great article Anonymous DailyFinance

    Rally the Troops. Hit the comment sections of all the major and local digital media.

  5. Yves Smith today:

    Most observers, yours truly included, had expected very little from the multi-regulator “foreclosure task force” announced last year. It was clearly designed to be an even more cosmetic exercise than the stress test charade, which does take a certain amount of brazenness (or more likely, confidence in the public’s inability to follow the three card monte). But a bad situation devolved; the Treasury had appeared to be in charge, and that department at least tries to put a minimum level of professional spit and polish into its charades. When OCC acting chair and chief bank enabler John Walsh got up to speak in an official capacity about the process in last week’s Senate Banking Committee hearings, it was evident there was not even going to be an effort to pretend that this was a serious undertaking.

    Even so, the mortgage “settlement” trial balloon floated in the Wall Street Journal this evening is an offense to common sense and decency. Notice how the word “fraud” is pretty much verboten in the MSM; the latest code word for what went awry is “breakdown”. This implies a benign sort of neglect, simply of not doing sufficient maintenance which led fussy machinery to quit working. It is mean to avoid contemplating, let along uncovering, Pinto-type decisions of weighing the costs of making the vehicle safer versus the litigation losses resulting from incineration by exploding gas tanks.

    Read more:

  6. Fed paints itself into corner. Add Obama administration,SEC,FDIC,OTS,OCC,50 State AGs,3000 county courthouses paint themselves into corner.
    As I have maintained all along, due to the aforementioned entities failing in their duties to all US citizens to address the mortgage fraud and resultant foreclosure fraud, the entire global financial system is in chaos. The resultant rise in commodity prices, bank runs,and rioting is a sympton of the frauds. If there is no meaningful return on treasuries then capital flows into commodities, and here we are, with no end in sight.

  7. THE A MAN

    Yes — and comments in conjunction with today’s article on the Fed Res.

  8. whoa…The comments following the “Obamanations Mortgage deal” WSJ article – flaming the those deadbeat borrowers , this gives an interesting perspective of the main readership of the WSJ – and MSM feeding fodder for the masses. Apathy is our country’s 2nd biggest hurdle , right after the dastardly dynamic duo – banksters & boobs[GOV]

  9. I cant help but think in ca and other nonjudicial states we may have some way to fight the vampires criminal acts thru the notary fraud,,


  10. ” He said – foreclosures will multiply (double). “So what??” — SAID the bank-friendly anchors. Ranieri answered — these are people — foreclosures are causing devastation to people and communities.”

    Pretty near that exact exchange occurred when Anthony Sanders, prof of real estate at George Mason U., testified before congress on 11/18/2010, just after Levitan. He was unbelievably cavalier about how these people need to be foreclosed upon and soon…..that we need to get them out posthaste. They are not paying their payments, it’s as simple as that!

    The lady rep from Ohio, can’t remember her name, pretty much *****slapped him, rightfully so. This guy was a disgrace to humanity. Tenure is wasted on the wrong people.

  11. A littleoff the subject but can someone explain how a “trustee” can foreclose on a property, assign its Credit Bid to a “Trust” that closed four years earlier? How is the IRS’ missing that which is hiding in plain site? All of these transactions are filed in public records and it happens on a daily basis. Maybe we should all be sending the IRS copies of these filed documents showing their REMICS “trusts” are not only purchasing properties after the “trusts” closing date but they are also purchasing properties that should have already been in the trust.

  12. Thank You Anonymous We need people to comment on the WSJ article. So if you guys and gals can pass it around and make comments.


  13. Louis Ranieri — father of subprime securitization – spoke today on CNBC. (Paraphrase) — He said – foreclosures will multiply (double). “So what??” — SAID the bank-friendly anchors. Ranieri answered — these are people — foreclosures are causing devastation to people and communities. Multiplying foreclosures will cause destruction – in many ways.

    Thanks Mr. Ranieri — some atonement. His solution? Private equity distressed debt buying — which he claims he is doing. And, once they buy – restructuring loans. Well — just tell us how you got these loans — and how much you paid.

    The A Man — interesting article – thanks.

  14. I have three friends in California that got foreclosed on by community banks, recently, The community banks used MERS. Actually they used the same tactics that the Big Banksters used. And because they are small banks they were able to foreclose even faster than the big Banksters.

  15. Vision Bank

    Not all small banks. Vision Bank in Florida is a $800 million bank with 24%-32% nonperforming loans; depending on what filings you read.

    There are lots of stories about this bank and the way they are chasing borrowers for foreclosure, it is amazing there is anoyone left to make loans too, with how they allegedly are refusing to work with some borrowers to right the ship for sever underwater loans.

    I have started a blog to help spread the word and get stories from other Vision Bank people.

  16. Az SB 1359 passed that’s great news

  17. Here is the complaint for David Becker the counsel at the SEC whose family made loads of money off Madoff investments—the fox watching the hen house again. This might be why the SEC turned away from doing any scrutiny on Madoff

  18. Here is a great recent complaint summarizing the ripoff tactics that led to the bubble and the crash. Allstate and others sue the banksters over toxic MBS.

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