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While Verizon workers toil without a contract, a report issued jointly today by Citizens for Tax Justice and the Institute on Taxation and Economic Policy shows that it’s not just its workers the company is short-changing; it’s all of the American people. For the last three years, Verizon has paid less than zero taxes. That’s right—through the use of corporate loopholes, Verizon has actually “made” money through its tax filings, according to the report, “Corporate Taxpayers and Corporate Tax Dodgers.”

One area where Verizon didn’t mind paying out? CEO compensation—to the tune of $18.1 million last year.

And Verizon is hardly alone: 29 other corporations listed on the Fortune 500, according to the report, paid either no taxes, or, like Verizon, enjoy a negative tax balance on their filings for 2008, 2009 and 2010. Other household names on that ignominious list include Honeywell International, DuPont, Boeing, Mattel, Duke Energy and Wells Fargo (which also benefited from the bank bailout).

As report authors Robert McIntyre, Matthew Gardner, Rebecca Wilkins and Richard Phillips write: (more…)

The Occupy Wall Street protests that began in New York City more than three weeks ago have now spread across the country. The choice of Wall Street as the focal point for the protests — as even Federal Reserve Chairman Ben Bernanke said — makes sense due to the big bank malfeasance that led to the Great Recession.

While the Dodd-Frank financial reform law did a lot to ensure that a repeat of the 2008 financial crisis won’t occur — through regulation of derivatives, a new consumer protection agency, and new powers for the government to dismantle failing banks — the biggest banks still have a firm grip on the financial system, even more so than before the 2008 financial crisis. Here are eleven facts that you need to know about the nation’s biggest banks:

– Bank profits are highest since before the recession…: According to the Federal Deposit Insurance Corp., bank profits in the first quarter of this year were “the best for the industry since the $36.8 billion earned in the second quarter of 2007.” JP Morgan Chase is currently pulling in record profits.

(more…)

More than 100 workers rallied at the Wells Fargo in Minneapolis calling on the bank to stop funding job killing politicians and use some of the federal bailout funds to aid Minnesota job seekers. (more…)

Zach Carter
Economics Editor, AlterNet; Fellow, Campaign for America’s Future

Despite escalating outrage over rampant foreclosure fraud, the Federal Reserve now appears ready to eviscerate a key mortgage regulation in an effort to spare banks the losses from their own wrongdoing. Even as bank executives preposterously claim to have wronged nobody in the foreclosure process, they’re pushing hard to unwind the only serious federal rule that protects borrowers from predatory loans and improper foreclosures. As if the last decade of abuse wasn’t bad enough, banks are once again mobilizing to screw borrowers in the pursuit of epic bonuses. And once again, it appears that the Federal Reserve has become an accomplice to this nationwide mortgage scam.

This week, top mortgage officers from the nation’s largest banks are telling the Senate Banking Committee that they aren’t kicking the wrong people out of their homes. This is simply false. Problems at mortgage servicers have been going on for years, long before banks got into trouble for illegally robo-signing foreclosure documents. People are kicked out of their homes without cause in the United States every day. If the top executives at America’s largest banks don’t know this fact, they lack the competence needed to run their organizations.

Law firms that work with troubled borrowers are jam-packed with horror stories about foreclosures caused entirely by banks, not borrowers. Families who never miss a payment come home to an eviction notice, or a thug breaking down their door.

But it’s even more common for borrowers to find themselves in trouble because their bank engaged in blatantly predatory lending. There is only one serious federal remedy for predatory lending, and the Fed is now knowingly trying to gut that remedy in order to help banks avoid losses from their own fraud. The remedy is called rescission, and it works like this:

If a bank failed to make key consumer protection disclosures about a mortgage, the borrower can demand that all of the interest and closing costs on the loan be refunded. Equally important, the bank must also stop all foreclosure proceedings and give up its right to foreclose. Once the bank gives up its right to foreclose, the full amount of the mortgage, minus interest and closing costs, becomes due. This isn’t a free lunch for the borrower, especially when the value of her home has declined dramatically, but it’s better than nothing, and it does impose real costs on banks. (more…)

By Zach Carter
Economics Editor, AlterNet; Fellow, Campaign for America’s Future

Anybody looking for a primer explaining why the current foreclosure fraud issue is a major systemic risk for the financial system should check out Mike Konczal’s new post for the Roosevelt Institute. I’m going to try and simplify it even further here, and present the only serious avenue available to solve the problem.

Three parties stand to lose big. The most obvious is homeowners—they’re being slapped with enormous, illegal fees invented by fraudulent documents, and frequently being illegally exiled from their homes.

Next are the mortgage servicers. These are the mortgage industry’s debt collectors, and their mere existence often creates huge conflicts of interest that have made the foreclosure mess much harder to clean-up. The dominant servicers are owned by megabanks—Bank of America, JPMorgan Chase, Wells Fargo, Citibank and GMAC control the vast majority of this work. A massive loss for a mortgage servicer means a massive loss for a massive bank.

Mortgage servicers are supposed to collect payments and negotiate with troubled borrowers in order to maximize the returns to investors. Who are these investors? Hedge funds and banks that bought mortgage-backed securities during the housing bubble.

The basic job of a mortgage servicer is to collect payments from borrowers, and pass them on to investors. If borrowers stop paying, servicers have to make those payments to investors out of their own pocket—until they actually foreclose. At foreclosure, the servicer gets to recoup its costs. So in many cases, servicers have a very strong incentive to cut whatever corners they can in order to recoup their costs and avoid forwarding more money to investors (This is only part of the story—since the servicers are megabanks, the other assets of the servicer bank can give the servicer wing an incentive to stall the foreclosure process like crazy—more on that in another post).

The point is, in many cases, servicers have a clear incentive to cut corners to speed up the foreclosure process, and stand to lose a lot of money if they don’t. (more…)

Zach Carter
Economics Editor, AlterNet; Fellow, Campaign for America’s Future

A lot of CNBC anchors do not seem to understand how regulation works. In fact, it appears that the network’s hosts don’t really grasp how basic economic competition works. If you’ve tuned into the business channel this summer, chances are you’ve heard its star reporters pushing the ridiculous bank lobbyist mantra that new consumer protections will actually make life harder for consumers. It’s simply not true. Wall Street reforms aimed at credit card billing practices and overdraft fees are already protecting the pocketbooks of ordinary citizens all over the country.

Bankers don’t like consumer protections for a reason: they’ve been able to make a lot of money in recent years by gouging consumers and tricking them into paying absurd fees. So financiers have dispatched CEOs and lobbyists to CNBC to make the case that their predatory profits are actually good for consumers. Here’s how the perverse argument goes: If you force banks to stop abusing some of their customers, banks have to make their money by charging higher prices to all of their customers. The argument flies in the face of basic facts about how markets work, but even if it was essentially true, the banker dystopia looks much better for consumers than the past decade’s status quo.

Take a look at Maria Bartiromo’s obsequious July 22 interview with BB&T CEO Kelly King (who personally took home over $5 million last year, with the economy in the doldrums). You can also find Wells Fargo CFO Howard Atkins making a similar case on July 21, and megabank lobbyist Steve Bartlett pushing the agenda on July 20 (to CNBC’s credit, the anchors push back a bit against Bartlett late in the interview). From Bartiromo’s King interview:

MB: So many people have said the fee business is a profitable and a substantial one for so many banks, whether it’s overdraft fees or any other fees. And if we have rules that they won’t be able to charge that, they’re going to find some other place to put those fees.

KK: Well that’s right. You know Maria, we have to cover our costs . . . we simply have to find a way to recover our costs, which ultimately means that there will be increased charges to the consumer. (more…)

Zach Carter
Economics Editor, AlterNet

Financial giants have figured out yet another way to profit from fraud. After devastating communities across the country with shady subprime loans, the mortgage industry has launched a new assault on America’s neighborhoods. Big banks are now outsourcing their foreclosure processing to shady law firms with a history of breaking the law for a quick buck. These foreclosure scammers forge documents, backdate signatures, slap families with thousands of dollars in illegal fees and even foreclosure on borrowers who haven’t missed a payment.

Andy Kroll lays out the insanity in a terrific piece for Mother Jones. “Foreclosure mills,” as they are known, have been around for years, but they’ve become a much bigger problem as the mortgage crisis has deepened. Fannie Mae and Freddie Mac spurred the creation of these social beasts decades ago to help them process large volumes of foreclosures quickly and cheaply. Pretty soon big banks wanted in on the action, and bailout barons at Wells Fargo, Citigroup and Bank of America starting sending foreclosures to these scummy law firms by the thousands.

Banks opt to outsource dirty work like this for a reason. It takes weeks to process the legal work necessary to kick somebody out of their home, since cops and judges don’t want to give borrowers the boot without proof. If you can cut down that processing time, you can save a lot of money on legal bills. Foreclosure mills cut costs for banks by cutting corners — when they can’t compile the documentation needed to push families out of their homes right now, they simply fabricate the documents. Still worse, these guys illegally withhold documentation from borrowers seeking to negotiate loan modifications with their banks — effectively forcing borrowers out of their homes instead of allowing them to cut a deal with the bank. When borrowers actually do straighten things out with foreclosure mills, the scumbags slap them with huge illegal fees. Kroll details a foreclosure mill that erroneously tried to evict a Florida couple who had been paying their mortgage on time. When it became clear that the couple could not be kicked out of their home, the foreclosure mill tried to charge them $18,500 in fees for mistakes committed by the foreclosure mill and the bank. The foreclosure mill even invented two new people who it said lived in the home in order to demand four sets of legal processing fees instead of two. (more…)

By James Parks
AFL-CIO Senior Writer

In Atlanta—one of the areas hardest hit by foreclosures—residents who are about to lose their homes demanded last week that Big Banks like Wachovia/Wells Fargo reform their policies and protect homeowners on the brink of homelessness.

More than 200 people, including community groups, clergy and labor and government leaders, attended a hearing at an Atlanta church and listened to area residents about to lose their homes explain the Big Banks’ role in the foreclosure crisis. The hearing was sponsored by the Atlanta Fighting Foreclosure Coalition and the AFL-CIO.

In often moving testimony, several Atlanta residents told how they had worked hard to build a life for themselves and their families only to have their dream dashed by losing their homes to foreclosure.

One witness testified his bank told him he was so far behind on his mortgage that he would need to win the lottery to catch up. An Atlanta Legal Aid worker said all the biggest banks jumped in with both feet into the subprime mortgage business.

AFL-CIO Executive Vice President Arlene Holt Baker, one of a panel of leaders who heard the testimony, said:

Foreclosure is not an equal opportunity tragedy. People of color are disproportionately hurt in part because we’re also disproportionately likely to have lost our jobs. But an even uglier factor is that we have been targeted—chosen—for the dangerous lending practices by big banks almost guaranteed to result in disaster.

The hearing comes as the issue of rising foreclosures is being hotly debated across the country, focusing new attention on the role of the Big Banks. The number of U.S. bank foreclosures reached a record high in the second quarter of this year, according to the research firm RealtyTrac. (more…)

By Mike Hall
AFL-CIO Senior Writer

A coalition of New York City unions and community groups, joined by city Comptroller John Liu, told some of the biggest banks that received hundreds of billions in taxpayer bailouts that it’s time to help out  New York homeowners facing foreclosure.

In letters to JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, PNC, Wachovia and U.S. Bank, the group says the banks are not doing enough to modify mortgages to help homeowners stay in their homes.

Nationwide, just 168,700 permanent modifications have been made under a voluntary federal program, with fewer than 12,000 in New York. But there are 265,000 homeowners deeply behind in payments or already in the foreclosure process. In 2009, foreclosures were up by 30 percent in the state over 2007 and in New York City just in the first quarter of this year, up 16 percent over the same time last year.

Michael Mulgrew, president of the United Federation of Teachers (UFT), an AFT affiliate, says:

We are trying to help [homeowners] who are doing the right thing. It seems the banks are not really doing a lot on this. They are not trying to negotiate in many instances. (more…)

 By Stacy Mitchell
Senior researcher, New Rules Project’s Community Banking Initiative 

The New Rules Project, in partnership with HuffPost’s Move Your Money campaign, is using its Community Banking Initiative to get out the word that banking locally can put the power back in the hands of individuals and communities, rather than Wall Street’s CEOs.

Those who wonder whether public anger at big banks and the Move Your Money sentiment sweeping the country is substantial enough to impact these giants need only look at the banks’ own marketing over the last few weeks to see the proof.

In a spate of new advertisements and PR maneuvers, the nation’s largest banks are working hard to win us back. They are, in effect, standing on our doorstep, flowers in hand, trying to convince us they’ve changed.

They’re using words like “local” and “community,” because they know quite well that there’s a rival for our affections. A recent Zogby poll found that nearly one in ten Americans had moved at least some of their business to small banks or credit unions.

One jilted lover, Citibank, has launched a blog devoted to showcasing the “new Citi.” The site, which Citibank is promoting through newspaper and magazine ads, features a video statement by CEO Vikram Pandit, who offers a few vaguely apologetic statements before detailing how Citi is a changed bank.

We’ve given up boozing and gambling, Citibank seems to be saying as Pandit assures us that the new Citi has embraced “a culture of responsible finance.”

In his opening post, Pandit describes this as a “new chapter” and invites us to participate in a conversation. “We promise we’re listening,” he writes.

So far, many of the user comments, which are moderated, appear to come from Citibank investors, but a few disgruntled customers have managed to get through. “What Cit has done to ‘help’ me in the last year: interest rate increase to 29 percent!” writes Peter. “I have never been late with a payment… [You have] a total lack of caring toward your customer base.”

“No amount of empty words can help you guys,” comments another, now ex-, customer of Citibank.

The site makes rather conspicuous use of the words “local” and “community,” suggesting that Citigroup, which has assets of $1.3 trillion, knows exactly where its customers are moving their bank accounts. When you load the site, a pop-up window that fills the center of the screen describes the company as a team of “local community bankers.”

Citi is not the only giant financial conglomerate wrapping itself in the mantle of a local community bank. During the Olympics, Wells Fargo, which has $1.2 trillion in assets and some 10,000 locations, ran television commercials in which it described itself as “the nation’s leading community bank.”

Although there’s no set definition of a community bank, it’s commonly defined as a bank that is rooted in one place and has no more than $1 billion in assets. Wells Fargo is about 1200 times that size.

In a biting response to the commercials, Camden Fine, head of the Independent Community Bankers of America, warned, “Wall Street mega-firms better be careful what they call themselves lest they be confused with actual community banks that regulators allow to fail.”

It’s no surprise that big banks are grabbing onto words like “local” and “community,” says Tim Pannell, president of Financial Marketing Solutions, which develops branding and advertising for banks. “Big banks understand that those are the key words that are creating success for a lot of community banks,” said Pannell. “That’s what they’ve been hammered with in all these local markets, where the community banks have said, you don’t need a big bank, what you need is a local bank.”

Rather than pretending to be small itself, JPMorgan Chase has taken a slightly different tack. New print ads running in the New York Times and elsewhere present the bank as a generous financial backer of small businesses: “At JPMorgan Chase, we recognize that small businesses are critical to economic recovery and to building America’s future…. When creditworthy businesses come to us for help, we look to find every opportunity to provide the funding they need to grow.”

According to FDIC data, however, JPMorgan Chase is very much a laggard when it comes to small business lending. With just 16 percent of its commercial lending going to small business loans in 2009, Chase is not even remotely in the same league as community banks, which devoted more than half of their commercial loan portfolios to small business. But even more stunning is the fact that Chase even lags other giant banks (those with $100 billion or more in assets), which allocated an average of 19 percent of their 2009 lending to small business loans.

(Take a look at these graphs to see just how little support for small businesses big banks provide.)
All of this is just an early taste of what the rest of year is likely to bring. Nervous about customer defections and holding a lot more cash than they had last year, big banks are planning to spend big bucks on marketing this year. We should expect more speeches about how they’ve changed and more false claims about community and small business. But let’s not be seduced into taking these jerks back.

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Stacy Mitchell, who has tracked corporate “local washing” across a variety of industries, is a senior researcher with the New Rules Project and its Community Banking Initiative.

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