Hold Wall Street banks accountable
Here's the message we sent to our members. After you’ve read it, please add your voice.
Wall Street banks, responsible for the brutal housing crisis that has displaced an estimated 7 million American families from their homes, have still not been held accountable.1 After receiving a massive taxpayer bailout, these same banks continue to bend laws, influence politicians, and ignore regulations. Meanwhile, the public pays a heavy price for Wall Street's corruption and greed — millions are out of work, face foreclosure, and feel the pain of ever-worsening economic conditions.
Now, the Obama Administration and Department of Justice have an opportunity to help make things right. Instead of pursuing a settlement deal that lets the banks off the hook2, they should commit to a full investigation into the actions of the big banks and the damage they've caused.
The housing crisis and the economic downturn it triggered has hit Black people and Latinos particularly hard. The mortgage industry targeted prospective home buyers with toxic loans and ballooning interest rates, and engaged in systemic predatory lending and mortgage fraud — including unlawful foreclosures, false documentation, and "robo-signing" of foreclosure documents.3 Wells Fargo was even sued for steering African Americans towards high-cost subprime loans when they qualified for better loans.4 Subprime and predatory lending, foreclosures, and plummeting home values have devastated Black wealth, which has fallen to its lowest level in 25 years.5
It's up to the Administration to show leadership and hold Wall Street banks accountable. Can you call on President Obama and Attorney General Holder to stand up to the big banks and push for a full investigation, compensation to homeowners, and real accountability for those responsible? Click the link below, it takes just a moment:
Three years ago, when the collapse of the financial sector pushed our economy to the brink, taxpayers bailed out the big banks that created the crisis. These same banks then proceeded to foreclose on millions of American families, while continuing to hand out astronomically-high bonuses and lobby against essential reform of the financial sector. During the crisis, the six biggest banks publicly received $160 billion of TARP bank bailout funds, and secretly borrowed another $7 trillion from the Federal Reserve. While they were getting bailed out by taxpayers, they were paying their CEOs millions of dollars and raking in record profits.6,7 Bank of America, Wells Fargo, Citigroup, JP Morgan Chase, Goldman Sachs, and Morgan Stanley together paid an income tax rate of only 11% in 2009 and 2010.8 Because they didn't pay the tax rate they're legally supposed to pay, the public lost out on $13 billion in tax revenue9 — revenue that could be used for vital public benefits and critically-underfunded social services.
The proposed settlement would release the Wall Street banks from civil and criminal liability, and ask them to pay for just a fraction of the overwhelming damage they’ve caused.10 Meanwhile, everyday Americans are paying the full price of Wall Street's crimes with our homes, jobs, savings, and our sense of security. As a result, the racial wealth gap is the largest it’s been in decades. According to a recent study, between 2005 and 2009 median wealth fell by 53% for Black households and 66% for Latino households, while falling 16% for White households.11
Thankfully, a group of state attorneys general from New York, Delaware, Nevada, Minnesota, Kentucky and California have said they will not agree to a settlement on matters which haven’t been investigated. California AG Kamala Harris and Nevada AG Catherine Cortez Masto have gone a step further, initiating a joint mortgage investigation alliance to assist homeowners who have been harmed by misconduct and fraud in order to bring state-based civil and criminal prosecutions.12
The housing crisis is far from over. Even among homeowners who are current on their payments, plummeting home values have pushed an estimated 15 million people "underwater," meaning that they now owe more on their mortgages than their homes are worth.13 In light of the ongoing crisis, thousands of people are joining a movement to support homeowners fighting foreclosure, with many taking action through eviction defenses, home liberations, and protests at banks and foreclosure auctions. Americans are demonstrating a groundswell of public sentiment that the banks cannot be allowed to return to business as usual.14
To understand the full scope of the damage caused by the big banks, President Obama and Attorney General Holder must push for a full investigation. An investigation is the best hope for just relief to millions of homeowners and accountability for Wall Street. Please urge the Obama Administration to investigate Wall Street banks and reject a settlement that condones their illegal and immoral practices, provides them immunity from prosecution, and fails to compensate victims of the housing crisis. When you do, please ask your friends and family to do the same:
Thanks and Peace,
-- Rashad, James, Gabriel, Dani, Matt, Natasha and the rest of the ColorOfChange.org team
December 10th, 2013
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1. "Regulators Push Foreclosure Crisis Solution," The Street, 03-07-11
2. "A Deal That Wouldn't Sting," New York Times, 10-29-2011
3. "Faulty mortgage papers a widespread problem," Associated Press, 09-02-2011
4. "Wells Fargo Target of Justice Department Probe," Huffington Post, 07-26-2011
5. "The Racial Wealth Gap’s Larger Than Ever." Color Lines, 04-26-2011
6. "Big bank execs: What they take home," CNN Money report
7. "Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress," Bloomberg News, 11-28-2011
8. How Wall Street Speculation and Tax Avoidance are Starving Public Revenues," National People's Action, 03-2011
9. See reference 8.
10. "How did the financial crisis threaten Main Street?" Federal Reserve Bank of San Francisco
11. See reference 4.
12. "Attorneys General of California and Nevada Announce Mortgage Investigation Alliance," California Department of Justice, 12-06-11
13. "How to Stop the Drop in Home Values," New York Times Op-ed, 10-13-2011
14. "'Occupy Our Homes' Protesters Highlight Foreclosures Nationwide," Huffington Post, 12-06-2011