Categories

Bank of America and JP Morgan Chase Fleeing Community in Face of More Accountability

New Orleans    Banks have become either near criminal enterprises or complete criminal enterprises.  This is no longer a matter of speculation.  This is now a documented fact with confessions made in the dock.   Even with the very minimal supervision being given big banks by regulators and the vast loopholes in any banking laws, some are abandoning whole lines of business when forced to be minimally accountable, which essentially means avoid outright fraud.  Let’s look at the mounting evidence once again.

A sweetheart deal was announced by 10 huge banks, including Wells Fargo, Bank of America, and JP Morgan Chase to pony up another $8.5 billion to offset their foreclosure abuses.  I criticized the deal as lightweight and a hand slap last week when it was $10 billion for 14 banks, and it is worse today.  Gretchen Morgenson of the Times added another stanza to that same song on Sunday.  Some housing advocates supposedly are saying “the devil is in the detail” or “let’s wait and see,” but may reflect existing partnerships with the players or defeat and desperation.  Morgenson is right:  the banks won again.  There are two ways of seeing this, and worse with these settlements; the game is over, there’s no longer a do-over coming for the victims.   HSBC, the huge UK and Hong Kong based international bank with significant US operations, has admitted to wild money laundering worth billions recently, so one shudders to imagine why they were not willing to agree to this last hand slap and come up with the cash for the Office of the Controller of the Currency (OCC) deal?

Bank America is so hammered at the notion of having to run a clean mortgage lending operation that it seems to have become convinced that rather than pretend they can supervise an above the board operation, they are largely deserting the home mortgage business which they briefly dominated.  Reports are that they have now shrunk from 20% of the market to only 4%.

If you think that’s wild, wait for this one.  The Wall Street Journal reported that JP Morgan Chase, led by the ever arrogant and pompous and unsurprisingly an advocate of less regulation, James Dimon, became the only one of the four largest US banks to get a downgraded rating of “satisfactory” for its lending under the Community Reinvestment Act (CRA).  CRA requires no discrimination in lending.  Let me tell you haw amazing this is for Chase to get a barely passing score.  Over the 35 years since CRA’s passage, the regulations and enforcement by the Federal Reserve has become so wishy-washy that to be downgraded Chase virtually had to send loan officers into African-American and Latino communities to moon homeowners while telling prospective home buyers from those communities to go screw themselves.  Get the picture yet?  CRA enforcement these days makes grading on a curve in Ivy League schools look like the school of hard knocks.   Recently ACORN International looked at Bank of America’s numbers in San Luis Obispo for a partner of ours and they made zero loans to African-Americans and Latinos, and they have a top CRA rating, ok?

When it came to Chase’s credit card operations, the OCC released a report based on 2011 numbers that said that the credit card lending operation showed “evidence of illegal credit practices inconsistent with helping to meet community credit needs.”  In plain English that means that the OCC found evidence of fraud.

These formerly bailed out banks are now lining up in community after community with division after division to essentially flip off consumers, dare them to complain, and then laugh at government regulators who try to curb their abuses.  There business model is now, lawyers first, customers last.

How can anyone pretend differently?