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.