Make the Banks Pay Their Fair Share!
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The foreclosure crisis just keeps getting worse. More than 12 percent of residential mortgage loans are in foreclosure or at least one payment past due. Millions of homes have been needlessly foreclosed on because banks have not modified homeowners’ mortgages to affordable levels. On top of this misery, the U.S. Department of Housing and Urban Development’s (HUD’s) funding for counseling to prevent foreclosures has been cut to zero.
Government efforts to hold banks accountable for the “robo-signing” scandal continue. Last month, federal regulators ordered banks to clean up their mortgage-servicing processes to prevent wrongful foreclosures. Federal and state officials also have proposed that the banks pay $20 billion in penalties. The banks have offered $5 billion, but they object to using the money to reduce mortgage principal amounts.
There may be more news to come on improper foreclosure practices by the banks. A new report shows the HUD Inspector General has found more evidence of wrongdoing:
The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents.
Holt Baker: ‘We Want Our Jobs Back’
Shouting, “We want our jobs back,” union members and community allies rallied and marched in Cincinnati yesterday to send Morgan Stanley the message that if it can thrive on taxpayer bailout money, it needs to make sure the community prospers as well. The action was part of the AFL-CIO’s more than 200 “Make Wall Street Pay” events taking place through the end of this week. Speaking to the crowd, AFL-CIO Executive Vice President Arlene Holt Baker blasted the selfish actions of the Big Banks:
At a time when young people across the country are worried about whether they will lose their jobs out there when they graduate or whether they will find a job, Morgan Stanley paid—get this—$3 million to their lobbyists to kill financial reform. While Morgan Stanley refuses to lend money to small businesses here in Ohio, they’re keeping the company afloat with $10 billion of your hard-earned money. We bailed out these Big Guys behind us, so now it’s time to take that money and give it to the community and local banks so that bank will start to hire people.
‘I Am Not Your ATM’
Working people have plenty to be angry with Wall Street about. A $700 billion bailout. Toxic assets and loan guarantees to the tune of hundreds of billions of dollars. A financial crisis and credit crunch. Billions of dollars in six- and seven-figure bonuses to the Wall Street executives who got us into this mess.
Unemployment reaching 10 percent. A mortgage crisis extending far beyond subprime loans. Abusive credit and debit card fees. More than five job-seekers for every one job.
Wall Street has treated Main Street as a giant ATM—gambling with the economy, then coming back with their hands out for help. But somehow, no matter how much help the banks need to survive, they always have the resources to fight proposals to regulate them or get them to pay their fair share.
To Create Jobs, Let’s Help Small Business, Not Just Big Banks
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When our banking system was in crisis last year, Congress acted with lightning speed to bail out banks—but although Wall Street and the banksters have seen a recovery, working families are still facing a crisis of disappearing jobs.
One of the best ways to make sure our economy is creating new jobs is to take funds from the Troubled Asset Relief Program (TARP) and rather than using them to just bail out the big banks, direct the funds to their intended purpose: restoring lending and credit to put people to work and our economy on the right track. That’s one of the key elements of the AFL-CIO’s five-point plan for job creation.
TARP, unfortunately, bailed out Wall Street and big banks without helping Main Street. Billions of dollars have gone to these big banks—but too often those dollars turned into executive pay and bonuses and Capitol Hill lobbying, not lending to spur economic growth. Even before the economic crisis, lending by banks to small and medium businesses was declining—and bank bailouts have not restored this critical lending.
Bailed-out CEOs Pocket Millions, Lay off Hundreds of Thousands
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Executives of banks that were bailed out with taxpayer dollars have pulled down stock options that guarantee them mega-million-dollar windfalls for years to come.
Worse, they’re using our taxpayer money to line their own pockets while laying off workers. Since Jan. 1, 2008, the top 20 financial industry recipients of bailout aid have together laid off more than 160,000 employees. In 2008, the 20 CEOs at these firms each averaged $13.8 million in compensation, for a collective total of over $250 million.
According to a report by the Institute for Policy Studies (IPS), the top five executives at 10 of the top 20 banks that have accepted the most federal bailout dollars received a combined increase in the value of their stock options of nearly $90 million.
Says Sarah Anderson, lead author of “America’s Bailout Barons,” part of IPS’s Executive Excess series:
America’s executive pay bubble remains unpopped. And these outrageous rewards give executives an incentive to behave outrageously, putting the rest of us at risk.
Were Bailout Funds Used to Plot Against Employee Free Choice?
This week, we learned that shortly after the approval of billions in bailout funding for major banks, at least two bailout recipients were involved in a conference call for lobbyists and Big Business figures plotting to defeat the Employee Free Choice Act.
Now, a coalition of five major government-reform groups is asking Congress to fulfill its duty of overseeing the bailout funds and making sure they aren’t being used for political purposes like fighting the freedom to form unions.
In a letter sent to Congress today, leaders of Public Citizen, U.S. PIRG, Change Congress, Democracy Matters and Public Campaign asked for an investigation into whether taxpayer dollars are being spent on political influence-peddling.
This story may be the tip of the iceberg. That’s why we’re calling for Congress to investigate whether Bank of America, AIG, or other recipients of billions in bailout money used taxpayer dollars to send “large contributions” to any political organizations.
Bailout Billionaires, Kill the Middle Class
We know how the bridge loan to automakers is being spent because the Bush administration made sure they only got aid after agreeing to tough stipulations.
So that accounts for $14.5 billion of our taxpayer money. But what about the rest of the $335.5 billion that went to Wall Street financial firms?
On “Morning Joe,” Joe Scarborough pointed out today that we do know how Wall Street spent $1.6 billion: on chauffeurs, company jets, home security, country club memberships and stock options.
Victory for the Sit-In Strikers
This just in from AP:
Bank of America says it will extend credit to a Chicago window and door manufacturer whose workers have occupied the factory for five days.
The bank says it’s willing to give the Republic Windows and Doors factory “a limited amount of additional loans” so it can resolves claims of employees who have staged a sit-in since Friday.
This is the same Bank of America that, after receiving $25 million in taxpayer bailout cash, cut off the company’s line of credit. The factory closed Friday and told workers they would not receive severance and accrued vacation pay.
