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Some of you pay attention to the Community Reinvestment Act and how it is used by community activists to convince banks to do a better job in their communities. During bank applications, community reinvestment activists can raise a host of issues, including questions about bank management.  This quote from the Federal Reserve's approval order for an application by Citigroup to buy First American Bank of Texas is pretty tough by Fed standards.

Given the size, scope, and complexity of Citigroup's global  operations, successfully addressing the deficiencies in compliance risk  management that have given rise to a series of adverse compliance events in recent  years will require significant attention over a period of time by Citigroup's senior  management and board of directors.  The Board expects that management at all  levels will devote the necessary attention to implementing its plan fully and  effectively and will not undertake significant expansion during the implementation  period.  

Essentially the Fed seems to be saying that Citigroup better clean up its act if it wants to get approval from the Fed for future mergers. Inner City Press, which frequently makes community reinvestment comments during mergers, and commented extensively on this one, deserves some love for this work. In a time when corporations seem to be totally in control, it is hopeful that a consumer group can hold a behemoth like Citigroup somewhat accountable.

For those of you who want more background on recent proposed changes to the Community Reinvestment Act you can find more information in this diary which builds on this diary.  Dancing Larry has pulled together this spot for people to focus more discussion on the CRA here.

Originally posted to bankbane on Sat Mar 19, 2005 at 07:43 PM PST.

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Comment Preferences

  •  Lukewarm reaction by Feds (none)
    That comment would have been far more effective attached to a denial. I'm sick of criminals on a truly mind-boggling scale getting nothing worse than an unpublicized scolding and some finger-wagging in their general direction.

    Recommended for bringing this to my attention, though. Awareness counts.

    Since we no longer have taboos, we have Abus.

    by oldjohnbrown on Sat Mar 19, 2005 at 07:55:13 PM PST

  •  Read the book Credit Card Nation (none)
    That book argues that the CRA is a joke. Increasingly what has happened in low income neighborhoods is that traditional banks have left. Filling in the vaccum have been fringe banks like check cashing outlets and payday lenders.
  •  plasticrevolution.org (none)
    The funny thing is (the ironic thing is) if these republicans actually do themselves in and we get our real america back, I will, start believing there is a god.

    heh.

    btw I put up a site hoping that we can chip away at another issue and bring them down even further

    plasticrevolution.org

    heck that Bankruptcy bill was passed in the Senate. 75-25 even! Just imagine what would happen to them if they actually couldn't get that one through after thinking it was a done deal.

    Just Imagine.

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