City's favorite banks didn't give back, report says

Saturday, November 18, 2006

Becky Gaylord

Plain Dealer Reporter

 

While Cleveland ignored its own lending law, the city handed some of its briskest banking business to lenders whose community reinvestment rec ords were among the worst, a new report has found. Cleveland ranked its bankers on how well they invest in the community, after failing for years to closely monitor their performance. While that oversight waned, the city continued to channel its business, such as deposits, to the banks.

 

more below:

 

To reach this Plain Dealer reporter:

 

[email protected], 216-999-5029

 

http://www.cleveland.com/cuyahoga/plaindealer/index.ssf?/base/cuyahoga/1163842264251970.xml&coll=2

JP Morgan Chase loses city's business over poor rank in review

Tuesday, November 27, 2007

Henry J. Gomez, Plain Dealer Reporter

 

Cleveland will withdraw millions of dollars in deposits from JP Morgan Chase, which scored the lowest in a review by the city of how banks reinvest in the community, officials said Monday.

 

Chase will lose the city's huge payroll account - valued between $420 million and $450 million - to Huntington National Bank, which offered lower fees ...

 

More at http://www.cleveland.com/news/plaindealer/index.ssf?/base/cuyahoga/119615638599510.xml&coll=2

Sounds like there might be two sides to this story?

" "We aren't sure why we never learned of the city's attempts to reach us for information until the scoring was completed."

 

Let's see... Huntington, Key, National City, Fifth-Third, Charter One, and FirstMerit ALL managed to submit appropriate info and were scored accordingly. If Chase couldn't get their act together (and the comparatively dinkier locals could), too d@mn bad.

Yeah. I wouldn't be surprised if it wasn't a bunch of bull on Chase's part. I hate these fucking bigwig banks.

 

But still, it would be interesting to hear more about their excuses. Maybe $100 million is no skin off their back? :)

JP Morgan Chase's presence here is largely through the acquisition of Bank One. Bank One, for whatever reason, made the decision to pull back their activities in Cleveland about 6 years ago. They booted out all but their best customers, scaled back the size of operations here, and moved out of what now is the 5/3 building into a couple floors in the Penton Media building, which is largely a sales office. I'm guessing no one locally knew what the heck the city was asking for, and somehow the request got lost through the layers of beaurocracy that a large institution like that breeds.

 

Losing $100MM in deposits is huge for any institution, and for this regional office I'm sure it's devastating. I can't believe they allowed themselves to be blindsided like that.

I'm confused, are they losing just $100MM or $425-450MM?  It sounds like they are losing the latter, which is the entire payroll account.  The others are splitting other city deposits from other accounts, valued at $90-100MM total.  Am I reading this right?

You're right, it's the payroll account. I looked at the wrong number. That's even worse.

" "We aren't sure why we never learned of the city's attempts to reach us for information until the scoring was completed."

 

Let's see... Huntington, Key, National City, Fifth-Third, Charter One, and FirstMerit ALL managed to submit appropriate info and were scored accordingly. If Chase couldn't get their act together (and the comparatively dinkier locals could), too d@mn bad.

 

probably went through a formal RFI (request for information process). certified mail, called for confirmation of receipt, blah blah blah. Smells like Chase really didn't care.

 

In contracting, if you don't comply with the RFI, you ain't getting a piece of the pie. (okay I just made that up, sorry).

It also sounds like Chase did in fact submit information ... just not the information the city requested. Ergo, it seems like they'll have a hard time arguing they weren't aware of the request. You'd also think that at least one executive associated with their local operations would have noticed the media hailstorm last year when Chase was also scored (see the article critical of Chase at the top of this thread), and made a note to prepare for the following year's review.

LOL I love how MayDay is never afraid to tell it like it is.