Anderson@Large

Wells Fargo, Fraudsters and Tainted Money

For preachers and some civil rights organizations, including the NAACP and the National Urban League, no money is tainted. For them, the only thing wrong with tainted money is there t'aint enough.

But enough is enough.

Today, the Justice Department announced a $25 billion agreement with the five largest mortgage servicers: Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial (formerly GMAC). Attorney General Eric Holder said:

This agreement – the largest joint federal-state settlement ever obtained – is the result of unprecedented coordination among enforcement agencies throughout the government. It holds mortgage servicers accountable for abusive practices and requires them to commit more than $20 billion towards financial relief for consumers. As a result, struggling homeowners throughout the country will benefit from reduced principals and refinancing of their loans. The agreement also requires substantial changes in how servicers do business, which will help to ensure the abuses of the past are not repeated.

Iowa Attorney General Tom Miller added:

This monitored agreement holds the banks accountable, it provides badly needed relief to homeowners, and it transforms the mortgage servicing industry so now homeowners will be protected and treated fairly.

In his remarks on the landmark housing settlement, President Obama said:

By now, it’s well known that millions of Americans who did the right thing and the responsible thing – shopped for a house, secured a mortgage that they could afford, made their payments on time – were, nevertheless, hurt badly by the irresponsible actions of others: by lenders who sold loans to people who couldn’t afford them; by buyers who knew they couldn’t afford them; by speculators who were looking to make a quick buck; by banks that took risky mortgages, packaged them up, and traded them off for large profits.

The NAACP and the National Urban League trade their credibility, such as it is, for sponsorship by banks that engaged in discriminatory and fraudulent lending practices. Pariah corporations have long sponsored civil rights organizations to buy their silence.

It's up to the rest of us to make some noise. Hey, Ben Jealous, how's your “partnership” with Wells Fargo working out?

Occupy Philly ‘Forecloses’ on Wells Fargo

Occupy Philadelphia is way past its expiration date, but I want to commend Occupiers for “foreclosing” on the Center City branch of Wells Fargo.

Sure, Occupy Philly’s direct action was symbolic. But their noise stands in stark contrast to the deafening silence of civil rights organizations, including the NAACP and National Urban League, that look the other way while pocketing the bankster’s money.

Pew Study Shows Black Americans are Broke

A new Pew Research Center study found the black-white wealth gap has risen to a record high. The median net worth of white Americans is 20 times that of black Americans.

Thirty-five percent of black households have zero net wealth. By contrast, only 15 percent of white households have zero assets.

The Pew study found:

The net worth of black households fell from $12,124 in 2005 to $5,677 in 2009, a decline of 53%. Like Hispanics, black households drew a large share (59%) of their net worth from home equity in 2005. Thus, the housing downturn had a strong impact on their net worth. Blacks also took on more unsecured debt during the economic downturn, with the median level rising by 27%.

The drop in the wealth of white households was modest in comparison, falling 16% from $134,992 in 2005 to $113,149 in 2009. White households were also affected by the housing crisis. But home equity accounts for relatively less of their total net worth (44% in 2005), and that served to lessen the impact of the housing bust. Median levels of unsecured debt among whites rose by 32%.

The study underscores the disparate impact of the subprime mortgage crisis. It is unconscionable the NAACP and the National Urban League are in bed with Wells Fargo, a predatory lender that was fined $85 million for steering creditworthy borrowers into subprime loans.

The Huffington Post reports:

The Department of Justice is preparing a lawsuit against Wells Fargo, the nation’s largest home mortgage lender, for allegedly preying upon African American borrowers during the housing bubble and steering them into high-cost subprime loans, according to three people with direct knowledge of the probe.

The company, the fourth-largest U.S. bank by assets, is currently embroiled in pre-lawsuit negotiations with the Justice Department in hopes it will settle the accusations and avoid a public lawsuit, these people said.

The allegations mirror those in public actions taken by the Federal Reserve and a separate lawsuit filed by the city of Baltimore.

[…]

Taken together, the various investigations paint a picture of a lender that profited by knowingly targeting less-sophisticated borrowers, in particular preying upon those communities that traditionally lacked access to a full range of consumer credit products.

The state of black America? Busted and broke.

Free to Speak Truth to Empower

I am a lifelong activist. Speaking up is in my DNA. It’s also what I do.

When you’re not concerned about losing “access,” you’re free to speak truth to empower.

Janis Joplin, a charter member of the 27 Club, famously sang: “Freedom is just another word for nothing left to lose.”

Ask a Woman Who Knows

Last week the leaders of two civil rights organizations, Marc Morial and Benjamin Jealous, met with President Obama to discuss job creation and economic growth.

The readout of the meeting notes that Obama “congratulated the leaders on their upcoming conventions.”

As expected, my post about black female civil rights leaders being left out of the meeting sparked accusations that I am a “hater.” My response: Guilty as charged.

I hate that Wells Fargo was the “Lead Sponsor” of the NAACP’s 101st annual convention. And they’re still hooked up in Los Angeles.

The predatory lender was a “Principal Sponsor” of the National Urban League’s centennial conference, and will be back on board when the League kicks off its annual conference this week.

Now check this out: On Wednesday, the Federal Reserve Board ordered Wells Fargo to pay an $85 million fine for steering borrowers with good credit into subprime loans. I hate when that happens.

The order reads:

The $85 million civil money penalty is the largest the Board has assessed in a consumer-protection enforcement action and is the first formal enforcement action taken by a federal bank regulatory agency to address alleged steering of borrowers into high-cost, subprime loans.

[…]

The order addresses allegations that Wells Fargo Financial sales personnel steered borrowers who were potentially eligible for prime interest rate loans into loans at higher, subprime interest rates, resulting in greater costs to borrowers. The order also addresses separate allegations that Wells Fargo Financial sales personnel falsified information about borrowers’ incomes to make it appear that the borrowers qualified for loans when they would not have qualified based on their actual incomes.

I have been asked to identify the black women leaders who should have been invited. I will not name names because that would be a betrayal of their trust. Although they know their stuff, they would be ostracized and penalized for breaking the silence.

And I would really hate for that to happen.

UPDATE: The Huffington Post reports the Civil Rights Division of the U.S. Department of Justice is investigating Wells Fargo for “allegedly preying upon African American borrowers during the housing bubble and steering them into high-cost subprime loans.”

NAACP, Wells Fargo Still Hooked Up

A year ago, I broke the story that Wells Fargo was the lead sponsor of the NAACP’s 101st annual convention. I put the NAACP on blast for getting in bed with an “unequal opportunity lender.”

The relationship came on the heels of the NAACP dropping its three-year-old racial discrimination lawsuit against the subprime mortgage lender.

The NAACP has refused to disclose the financial terms of its “partnership” with Wells Fargo. But as a 501(c)(3), what it does in the dark eventually will be made public. So I made a mental note to check the civil rights organization’s IRS Form 990 to see how much it had been paid to hook up with the predatory lender.

It’s clear what the NAACP has become; now they’re just negotiating the price. So frankly, I put the issue on the backburner. That is until Saturday.

During the Investigative Reporters and Editors’ ethnic media watchdog workshop at the New York Times, IRE Executive Director Mark Horvit led a session on “key documents you can't live without.” Those documents include IRS Form 990, which nonprofits must file and make available for public inspection.

Back in the day, one had to go to a nonprofit’s office and demand to see its most recent filing. In the age of the Internet, one merely has to visit Guidestar and search its database.

It was serendipitous that someone asked Horvit to look up the NAACP’s Form 990.

A review of the NAACP’s 2009 Form 990 shows the organization raised a little over $3.5 million for its centennial convention in New York City, which I attended.

NAACP 2009 Form 990

In 2008, the NAACP raised $3 million for its 99th annual convention in Cincinnati.

The 990s set a baseline. I will update the story as information becomes available.

Meanwhile, the NAACP’s partner is under investigation by federal regulators and all 50 state attorneys general for illegal foreclosures by its mortgage servicers.

On Saturday, the New York Times editorialized:

Americans know that banks have mistreated borrowers in many ways in foreclosure cases. Among other things, they habitually filed false court documents. There were investigations. We’ve been waiting for federal and state regulators to crack down.

Prepare for a disappointment. As early as this week, federal bank regulators and the nation’s big banks are expected to close a deal that is supposed to address and correct the scandalous abuses. If these agreements are anything like the draft agreement recently published by the American Banker — and we believe they will be — they will be a wrist slap, at best. At worst, they are an attempt to preclude other efforts to hold banks accountable. They are unlikely to ease the foreclosure crisis.

The NAACP’s hookup with Wells Fargo is more than a disappointment. It’s a measure of the extent to which the nation’s oldest civil rights organization has lost its way.

NAACP, Wells Fargo and Kansas City Blues

The NAACP kicked off its 101st annual convention on Saturday at the Kansas City Convention Center.

 

Some are singing the blues because President Barack Obama decided to skip the convention.

The Senate is expected to vote on sweeping financial reform legislation this week.

It would have been awkward for Obama to talk about the need to change the way the financial sector does business at a convention whose lead sponsor is Wells Fargo.

The reckless practices of Wells Fargo and other bailed-out banksters triggered the financial crisis that drove the economy into a ditch.

Although Wells Fargo is being sued by several cities for targeting African Americans with subprime loans, the predator lender looms large over the convention.

While the NAACP stonewalls on the terms of its “partnership” with the predatory lender, the Associated Press reports Wells Fargo “will be at the convention talking to borrowers about modifying loan terms.”

If Wells Fargo’s record on loan modifications is any indication, it will be just that – talk.

Consider: An analysis by ProPublica found the federal government’s loan modification program, Making Home Affordable, is “still sputtering.” The $75 billion foreclosure prevention program is administered by the Treasury Department.

To date, only 23.8 percent of Wells Fargo’s borrowers have received a permanent loan modification. Nearly 50 percent have had their temporary modification canceled.

Reports vary as to the number of people at the convention. An indeterminable number are Wells Fargo borrowers.

How many NAACP convention-goers will have their loan modified after their talk with a housing counselor? Few, if any.

The “Financial Freedom Campaign Center” is little more than a fig leaf to cover up a partnership that benefits only certain people.

The NAACP is convening in the “Show Me” state, but it has yet to show the African American community how hooking up with Wells Fargo is in their interest.