A campaign of National People's Action

Showdown in Chicago: Creating a “Which Side Are You On” Moment

In Foreclosures on October 22, 2009 at 8:17 pm

It would be hard to dream up a story as incredible as this – the same financial institutions that drove a record foreclosure crisis, sent our economy into a deep recession, and needed billions upon billions in taxpayer bailouts, are spending money like never before to defeat financial reform that would prevent a future meltdown.

The meaning of this incredible story in the lives of everyday Americans couldn’t be more disparate than that of the continuation of life in the clouds for Wall Street CEOs. The scorecard reads like one of the all-time great routs in world history.

The American People
7.6 million jobs lost
Trillions in retirement savings wiped out (link: PDF)
Almost 2 million foreclosures this year alone

The Big Banks
Meanwhile the nation’s four largest banks are back to raking in billions in profits. Here are the numbers through the first three quarters of 2009.
Wells Fargo – $8.8 billion
JP Morgan Chase – $8.4 billion
Bank of America – $6.4 billion
Citigroup – $6 billion

Now, as if testing how much taunting the American people can stand, financial institutions are gearing up for bonus season, with Goldman Sachs announcing that their 2009 bonus pool has reached nearly $17 billion.

The nation’s largest banks and their lobbyists helped lead the charge to deregulate the financial markets. We have seen how that plan worked out. Now, they are activating their powerful lobbying apparatus to defeat common-sense solutions that would protect people and prevent another crisis. Let’s not hand the keys back to the same impaired drivers who just drove us into the ditch.

In this David vs. Goliath fight, we need a game-changing moment. That is exactly what a coalition of people from all walks of life intend to create when they come to together in Chicago October 25-27. We aim to hold banks accountable by going toe-to-toe with the American Bankers Association, a trade and lobby association that includes the nation’s largest banks.

The big banks and their convention are the focus of this Showdown in Chicago – but a message of “Which Side Are You On?” should be aimed directly at members of Congress and the Administration. Will they continue to side with the financial industry and their hefty campaign contributions, or will they stand squarely with the American people and push for significant financial reform? Our message should be loud and clear: “Stand with us!” Until our elected officials know there is a price to pay for siding with big money over everyday people, the average American will continue be on the losing end.

The good news is that this story does not have to end in tragedy. There is still time to write a happy ending. But, the last chapter can’t be written by Wall Street. It can’t be written by bank lobbyists. And it can’t be written by politicians who are more beholden to campaign contributions than they are to their constituents.

The last chapter must be written by the American people – and it starts in Chicago.

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Iowa CCI pushes Wells Fargo to stop financing payday loans, wins meeting

In Foreclosures on October 14, 2009 at 4:07 pm

Oct 13, 2009 – Over sixty members of Iowa Citizens for Community Improvement (CCI) protested at Wells Fargo’s downtown Des Moines office today where they outlined the company’s extensive and long-standing ties to the payday lending industry. Following the protest, Wells Fargo officials called the Iowa CCI office and agreed to a meeting between Wells Fargo’s top Iowa official and CCI members.

CCI research shows that Wells Fargo has provided hundreds of millions of dollars to payday lenders including Ace Cash Express, Advance America, EZ Money, and others. This research also shows that payday lenders are overrunning low and moderate-income neighborhoods in Des Moines.

“It’s an outrage that payday lenders can charge over 400 percent interest,” said Ferol Wegner, CCI member from Des Moines. “I was shocked to learn that Wells Fargo has funded this practice for at least 10 years to the tune of well over one billion dollars.”

Payday loans are loans with 400 percent or higher interest rates that are due in full in two weeks. Iowa CCI members say that these potentially dangerous products trap many customers in a cycle of debt that can be impossible to escape.

Ferol Wagner of CCI talks about the criminality of payday loans

Ferol Wagner of CCI talks about the criminality of payday loans

Through documents filed with the Securities and Exchange Commission (SEC) and Uniform Commercial Code (UCC) filings, Wells Fargo has provided multi-million dollar lines of credit to at least nine payday lenders across the country. And, of the nine payday lending chains operated in the greater Des Moines area, six can trace their funding back to Wells Fargo, including Advance America, Ace Cash Express and Mister Money.

“We insist that those who provide lines of credit to the payday loan industry stop this practice immediately,” said Mike McCarthy, CCI member of Des Moines. “Today we are presenting our demands to Wells Fargo because they are one of the largest providers of these lines of credit to this industry.”

CCI members took their demands in the form of a letter to Scott Johnson, Iowa/Illinois Regional President of Wells Fargo, to the Wells Fargo office at 666 Walnut Street in downtown Des Moines. “We are asking you, as a leader of one of the largest banks operating in Iowa and across the country, to immediately stop financing the payday lending industry,” read the letter. Within an hour of delivering the letter, CCI received a call from Wells Fargo officials to inform them that Scott Johnson would meet with a group of CCI members on Oct. 21 at 9:00 a.m.

Later this month on Oct. 25 & 26, CCI members will meet with thousands of others from community organizations across the country in Chicago to push for needed financial reform. Billed as the “Showdown in Chicago“, grassroots groups plan to take to the streets and demand a banking system that puts the American people first.

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Publicly Rejecting to Treat Consumers Reasonably?

In Action, Bank Accountability, Financial Reform on October 7, 2009 at 3:31 pm

The arrogance of American Bankers Association has reached new heights.  It has publicly stated its opinion that it shouldn’t have to treat the public reasonably.

For years, banks have relied on deceptive loan terms with hidden ‘gotcha’ clauses and carefully disguised language intended to bilk people out of their money.  These industry standard practices are what brought our economy to its knees and what has caused millions of families to face foreclosure and the loss of their home.

To address this, the Obama administration and Congress designed a proposal for a new Consumer Financial Protection Agency (CFPA). As proposed, the CFPA would force financial institutions to act honestly and above board with people – goals the banking and financial industries are fighting tooth and nail.

Last week, Committee Chair Barney Frank and the House Financial Services Committee once again sided with the banks instead of with the American people.  Facing pressure from the financial industry, including promises of millions of dollars in campaign contributions, the Committee removed valuable consumer protection provisions from the proposed legislation to create the Consumer Financial Protection Agency.

Bankers’ irresponsible behavior caused the worst economic collapse our country has seen in generations, yet bankers still think business as usual is acceptable.  Banks want to continue to offer complicated, deceptive products that cheat the American people out of their money and the pursuit of their dreams.

How bad is it? The original language in the CFPA legislation required banks to offer simple and straightforward loans with terms that could be understood.  The American Banker’s Association said no way.  In a press release thanking Chairman Frank for stripping these provisions out of the bill they stated,

“[the new bill] removes the unworkable requirement that communications with consumers be “reasonable”

The members of American Banker’s Association have systematically pillaged our neighborhoods.  It has treated our savings like their own personal stake at the Wall Street casino; our communities have been flooded with toxic credit; banks refuse to work honestly with the millions of families in foreclosure and continue to fund the worst payday lenders.  But money still talks in Washington and the banks have plenty of it.

But the American Banker’s Association isn’t content with how much they’ve weakened the bill so far.  The ABA continues to spend millions on lobbyists and campaign contributions to kill or continue to weaken the CFPA to the point of ineffectiveness.  And it’s working.  Representative Melissa Bean (D-IL) is planning to gut all State law protections:  Representative Dennis Moore (D-KS) is planning to try and exempt the majority of the industry from the CFPA’s reach; Representative Steve Dreihaus (D-OH) wants to take away the CFPA’s authority to examine financial institutions for compliance with the law.

In the last two years these three legislators have collected nearly $2 million dollars from the financial and real estate industry. It’s time to ask Congress once and for all: WHOSE SIDE ARE YOU ON?

On October 25-27 in Chicago this question will be posed to members of Congress. People are gathering in Chicago at the end of October to tell the banks and Congress to start doing the right thing.  Join us!

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