A New Plan to Make Wall Street Pay for Creating the Foreclosure Crisis

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Rev. Jesse L. Jackson, Sr.

Last week, as Rep. Maxine Waters, D-Calif., convened a House Financial Services Committee hearing, featuring the CEOs of Wall Street’s biggest banks, the financial watchdog group Better Markets released a stunning report on the banks’ criminal records: Wall Street’s Six Biggest Bailed-Out Banks: Their RAP Sheets and Their Ongoing Crime Spree.

The report profiled the records of Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo. Detailing the staggering $8.2 trillion that was committed to bail out these banks when their excesses blew up the economy in 2008, the report laid out what it called their RAP sheets — the record of illegal activity for which they have been fined a cumulative total of $181 billion in over 350 major legal actions.

The report concludes that these big banks “have engaged in — and continue to engage in — a crime spree that spans the violation of almost every law and rule imaginable. …That was the case not just before the 2008 crash, but also during and after the crash and their lifesaving bailouts. … In fact, the number of cases against the banks has actually increased relative to the pre-crash era.”

The scope of the illegal activity is breathtaking — overcharging soldiers on their mortgages, conspiring to fix the price of credit card fees, massive improper foreclosure practices, billing customers for services never provided, rigging interest rates, violating sanctions against countries like Iran, and more.

The large fines are, for these mega-banks, merely a cost of doing business. And so the crime wave continues.

The banks particularly prey on the vulnerable, regularly pleading guilty of discriminating against African Americans and Latinos. Long after the bailout, for example, JPMorgan Chase paid $53 million to settle charges that it had discriminated against minority borrowers by charging them more for a mortgage than white customers.

The banks were at the center of the housing bubble and its collapse. About 10 million people were displaced from over 4 million homes across the country. Minority neighborhoods were hit the hardest.

For decades, the banks red-lined minority areas, depriving residents of access to mortgages or loans for small business development. Then, when the banks inflated the housing bubble, they targeted minority neighborhoods, peddling predatory mortgages to customers who they knew could not afford them. As one former Wells Fargo mortgage broker explained in a sworn affidavit, “The company put ‘bounties’ on minority borrowers.

By this I mean that loan officers received cash incentives to aggressively market subprime loans in minority communities.” At the height of the rapacious lending boom, nearly 50 percent of all loans given to African American families were deemed “subprime.” The New York Times described these contracts as “a financial time bomb.”

When housing prices cratered, the bomb exploded. Mass evictions left entire neighborhoods scarred by empty houses. The banks then failed their legal duty to keep the homes up, with neighborhoods turning into waste pits. With homeowners evicted, local revenues declined. Stores were shuttered; schools closed; local services decimated.

Those victimized were most often those who did the right thing: working steadily, putting together the money for a down payment on a home for their children.

A rising African American middle class was eviscerated. In 2012, the National Fair Housing Alliance reported that African Americans suffered “the largest loss of wealth for these communities in modern history.” Between 2009 and 2012, African Americans lost just under $200 billion in wealth, bringing the gap between white and black wealth to a staggering 20:1 ratio.

According to the Better Markets report, the six biggest banks have paid over $181 billion in fines and settlements for their criminal activity. This money generally goes back into the general fund, unless the settlement agreement provides for some relief to those injured.

That too often leaves those most injured by the illegal practices out in the cold. What would make sense is that any fines that aren’t used to recompense the direct victims be put into a fund to rebuild the communities most injured. Supplement that with revenues from sensible taxes on the banks — like Elizabeth Warren’s call for a simple corporate tax on the profits they report — and a multibillion-dollar fund could be created to help repair the communities most impacted by the bankers’ crimes.

Use that money not to line the pockets of the big banks again, but to seed community banks and cooperatives, to support nonprofit affordable housing development, to create postal banking services that could liberate the poor from the usurious charges of payday lenders.

That might not end Wall Street’s addiction to crime, but it would help repair the communities that they have devastated. One would think that law-and-order conservatives might support this act of simple justice.

7 COMMENTS

  1. Currently in US District Court Eastern District Tennessee Cause Number 2:19-CV-005 is Proceeding under Court Orders. The PACER FILINGS reveal many Months and Years before the Congress Was CONFRONTED by Us … These measures were being Forced and Implemented. See
    https://toxiczombiedevelopments.wordpress.com/on-notice-us-congress-us-senate-us-doj/

    The Vastness of the Crime Scene is Staggering and these BANKSTERS will have to FIRST Compensate Us the original Whistle Blowers. TRUST ME Our Efforts are over 3 Decades Old and WE MEAN BUSINESS

    The SWAMP FOX
    https://toxiczombiedevelopments.wordpress.com/exposing-the-money-laundering-dragons/

  2. Rev Jackson I called your office to tell of the crimes of Wells Fargo and the other bank back in 2009-2010 however, this was the love period for new President Barack Obama, who if you said anything about what he was not doing, you were either an Uncle Tom or racist.

    Sen Warren was on the right track in requesting that then Atty Gen Eric Holder (lawyer to Wall Street banks) release then name of the victims as found during the Independent Foreclosure Review Board, however old colluder that Holder was, did not release the finding with allowed the bank to keep the illegal gains from the illegal foreclosures of the Troops, blacks and Hispanics that they refused to underwrite the Obama modification!

    The VA HAMP demanded that the Dept of VA borrowers files be underwritten for the HAMP & VA HAMP before a foreclosure could be considered! It did not say that the underwriting was at the decision of the banks as to them wanting to underwrite but as a condition of the TARP agreement. Jan 8, 2010, Circular 26-10-02 granted a right for every Dept of VA borrower if qualified, a modification under the HAMP or VA HAMP!

  3. Rev. Jackson: April 19, 2019
    I’d like to tell you a different story.
    A different story from:
    1. Banks loan money,
    2. there never seems to be enough money,
    3. 100,000 foreclosures In MA And Student debt in MA over the last 10 years
    To a story of;
    1. so-called borrowers are the creditors
    2. there is always enough money
    3. never have another foreclosure and NO MORE STUDENT Debt.
    With that said:
    If you knew for certain, Without a doubt, that banks DO NOT lend depositor’s money would you be upset?
    If you knew for certain, without a doubt, that banks CANNOT lend their own money, would you be concerned?
    If you knew for certain, without a doubt, that your signature on the promissory note CREATES NEW MONEY for the economy…would you be angry?
    If you knew for certain, without a doubt that you don’t really have to make those monthly mortgage payments back to the bank, would you do it?
    If you knew for certain, without a doubt, that during foreclosure the bank or other entity is REALLY trying to STEAL your home?…would you be pissed?
    The most important responsibility of the State of Massachusetts or the Federal Government is the issuance of debt-free, honest money on the productive output of the people of Massachusetts.
    China does it. China’s money is created debt free by China, not borrowed from private bankers. We must learn to do the same.
    Money MUST BE MADE public honestly and with full disclosure for the easy exchange of goods and services and be publically issued debt-free for ALL the people, rather than a borrowed private usurious, deceptive, corrupting monetary system.
    Which you may or may not understand but with a10 year pause in your mortgage payments and time to shop, prepare and cook healthy food from the farms of Massachusetts you will:
    Eliminate foreclosures
    Eliminate budget problems
    Eliminate inflation
    In order to accomplish this task I SUGGEST two bills for the legislation to pass:
    1. HB 1482: Declare a 10 year moratorium on foreclosures thereby enabling ALL of us to take a good look at our current debt-based, interest bearing, usurious, deceptive, dishonest, unjust, corrupt and fraudulent monetary system.

    2. HB 2528: TAX ALL PROCESSED FOOD: remove the tax exemption on processed food.

    David Snieckus
    99 Crescent Street
    Newton, MA 02466
    617-964-2951

  4. Mr. Jackson, thank you for getting into the fray, I recall you and Pastor E.V. Hill addressing the middle east matter, you’ve never failed to address any matter of conflict or injustice, thank you. If I may, there seems to be a universal misunderstanding as far as “banking” is concerned. In fact, it may come as a total shock, to almost everyone that there are no “banks”, at least in regards to the several states of the union is concerned. These entities, under recent grilling are not a creation of Congress; they are “foreign corporations”, not permitted to conduct banking in the several states. While the following is not intended to be exhaustive, but simple an example. Bank of America, is in fact Bank of Italy, Chase Bank is actually domiciled in London, Citibank is domiciled in Ireland, Credit Suisse is domiciled in Switzerland, Deutsche Bank is domiciled in Germany, Wells Fargo is a “Bank Holding Company” not permitted to contract with the general public. Additionally, there are no provisions in title 12 U.S.C. BANKING, that has any application for “mortgage loans” for the residents or citizens in the several states, in, fact the limited provision for owning any type of “real property” is a “bank building under 12 U.S.C. 29. These entities are limited to the restrictive provisions of 12 U.S.C.615, banking in insular possessions.

  5. Nice try. Obama also promised “protection” and “substantial compensation” to veterans defrauded by Wells Fargo foreclosures. All these promises were false just to get him elected. When Judges will be held criminally liable for enabling bank’s (actually, creating it) foreclosure crisis? Without a Court order no single foreclosure would succeed

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