Capital One’s intentions to acquire the US subsidiary of ING Group means that the Federal Reserve will have to show that it wants to make sure that our financial system does not become even more highly concentrated in the hands of a just a handful of banks.

Critics of the deal are going to say that if Capital One gets another $82 billion in deposits held by American consumers, it will hurt small businesses when they try to get loans. It is an argument that (more…)

The Office of the Comptroller of the Currency has just released its latest CRA exam results. The news is hardly surprising – everyone passed!

In fact, of the 35 banks evaluated, 4 were given an “outstanding” and 31 were recognized as satisfactory. There were no “needs to improve” or “substantial noncompliance” ratings.

Grade inflation has run amok at the OCC for some time.

The OCC gave an outstanding rating to First National Bank of Audrain, located in Mexico, Missouri. This is in spite of the fact that FNB Audrain made no loans (zero) to low-income borrowers. There were plenty of low-income people in Mexico, Missouri. The OCC reports that it can characterize 16 percent of families in the area as low-income. FNB of Audrain made no loans in low or moderate income census (more…)

Jackson Hewitt’s expanded partnership with MetaBank, a small thrift in Storm Lake, Iowa, adds one name to the short list of banks that provide liquidity to national tax prep chains for their refund anticipation loans. But, what or who is MetaBank?

• MetaBank has $652 million in deposits, with 13 branches, in two states (Iowa and South Dakota)
• MetaBank has faced two enforcement orders since 2001 from its primary regulator, the Office of Thrift Supervision. The most recent, in June of 2009, involved an employee who absconded with $4 million in deposits.
• MetaBank received a satisfactory for its last Community Reinvestment Act exam in 2007.
• MetaBank has less than $1 billion in assets. As an intermediate small institution, it will not have another exam until 2011.
• MetaBank made two mortgage loans to low-income borrowers in 2007, and only 5 to moderate income borrowers.
• The bank made three loans to borrowers in low-income census tracts in 2007. In the period from 2005 to 2007, MetaBank made a total of 5 mortgage loans to borrowers in low-income census tracts.
• Low-and-moderate income census tracts make up 25.2 percent of census tracts (with 20.8 percent of housing units) in the four MSAs where the OTS examines MetaBank. Only 7.5 percent of mortgage loans made by MetaBank went to borrowers in low-and-moderate income census tracts. Median family incomes for census tracts in those MSAs are such that a moderate income is less than $54,160.
• MetaBank made two qualified Community Development investments, both in bonds to Urbandale, Iowa for economic development. Each bond was for $95,000.  The bank made about $31,000 in donations to local community organizations.
• The bank claimed that a fair amount of small business lending should qualify as a community development loan – with 87 small business loans and 330 small farm loans in low and moderate income census tracts. The bank did not report any community development activity in three of its four assessment areas.  The OTS said that it had a “good record,” of community development lending, but “poor responsiveness” to community development needs.  Odd.

This information is relevant for groups that want to work with MetaBank.  The institution is going to be (more…)

How do these folks bank?

• 
• Mobile banking?
• Internet banking?
• ATM/point of purchase banking
• Branch banking?

OK…ha ha.  But there is a point…as our banking system is duplicated in other countries, what assumptions about US banking are relevant, and what notions should be dropped?

I believe that mobile banking is the way of the future.  Already, mobile banking is the preferred mode of banking for new customers in India and China.

The Indian experiment

India is a developing country, but it is one that is rapidly adding to its currency reserves.  India remains a country with too much of its population living in villages.  The village in India is a bit like the family farm in (more…)

Minutes ago, the Office of the Comptroller of the Currency demonstrated once again why no one takes their CRA exams very seriously.

The OCC released evaluations for 27 banks.  All of the evaluations were made from October 15th through November 14th.  No banks were given any grades that would reflect shortcomings in service, lending, or investment to their local areas.  Twenty-five passed, and two passed with “outstanding” colors.

How good is an “outstanding?”  Well, the people who run your credit card are apparently doing an outstanding job at making you happy.  Citibank (South Dakota) NA received an outstanding.  Did they do an outstanding job? Sure, maybe they are charging millions of Americans up to 29.9 percent on their credit card debt, but they did it well, right?

Drilling down to Citibank’s evaluation, it is easy to see some of the reasons for why the CRA needs to be (more…)