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As Robert Borosage wrote, “Too Big Too Fail” has become “Too Big To Jail.” According to attorney general, our big banks have gotten so big that bringing criminal charges against them for blatantly criminal acts “will have a negative impact on the national economy, perhaps even the world economy.” (Click here to tell Attorney General Eric Holder that no bank should be “Too Big To Jail,” and no bank should be above the law.) is ”Too Big To Jail” a license to kill? Does that mean big banks can get away with murder — or at least negligent homicide?

It sounds like Wells Fargo may have gotten away with murder or some lesser charge in the case of Larry Delassus, innocent victim of “death by typo” c/o Wells Fargo. [Via Digby.]

On the morning of Dec. 19, 2012, in a Torrance courtroom, Larry Delassus‘ heart stopped as he watched his attorney argue his negligence and discrimination case against banking behemoth Wells Fargo.

His death came more than two years after Wells Fargo mistakenly mixed up his Hermosa Beach address with that of a neighbor in the same condo complex. The bank’s typo led Wells Fargo to demand that Delassus pay $13,361.90 ­— two years of late property taxes the bank said it had paid on his behalf in order to keep his Wells Fargo mortgage afloat.

But Delassus, a quiet man who suffered from the rare blood-clot disorder Budd-Chiari syndrome and was often hospitalized, didn’t owe a penny in taxes.

One of his neighbors, whose condo “parcel number” was two digits different from Delassus’, owed the back taxes.

In a series of painfully tragic events, Wells Fargo relied on its typographical error to double Delassus’ mortgage — from $1,237.69 to $2,429.13 — as its way of recouping the $13,361.90 in taxes Delassus didn’t owe. Delassus, a retiree living on a $1,655 check, couldn’t meet the mysteriously increased mortgage. He stopped paying, and soon was far behind on his mortgage.

Delassus and his attorney did not discover until May 2010 that a mis-entered number had dragged Delassus into this spiral. As court documents obtained by L.A. Weeklyshow, after admitting its error, Wells Fargo foreclosed on Delassus anyway and sold his condo.

Delassus had to move to a tiny apartment in an assisted-living home in Carson.

Friends say he didn’t die of heart disease that day in court, as the coroner found. He was, they believe, killed by a system so inhumane that it could not undo a devastating piece of red tape the system itself created.

According to the LA Weekly piece, Wells Fargo later acknowledged its error, but by then Delassus — a disabled veteran who suffered from Budd-Chiari syndrome —had stopped paying his mortgage after Wells Fargo doubled his payments, leading the bank to foreclose. (Strangely, there was an unexplained $2,861 discrepancy between the $13,361 Wells Fargo said it paid in property taxes on Delassus’ behalf, and the $10,500 the bank admitted in court documents was mistakenly charged to Delassus.) Not only that, but the bank refused to let Delassus resume his regular mortgage payments in the $1,237 installments he paid before the bank mistakenly jacked-up his payments.

Instead the bank demanded that he pay a sizable “reinstatement cost,” which is usually the past due amount plus fees. The bank never told Delassus how much his reinstatement cost would be. Instead, Wells Fargo demanded full payment on the condo, payment due within 24 hours. Delassus sued Wells Fargo for negligence and discrimination against a disabled person. To add insult to injury, in May 2011 the bank sold Delassus’ condo one day after he’d been released from the hospital after a bout of illness.

According to friends, Delassus still had enough faith in our system of justice to honestly believe that he would return to his home of 16 years. He was in court, listening to his attorney argue his case when he slumped over and died.

Here was a guy who received a notice out of nowhere from Wells Fargo, demanding that he repay the bank for property taxes he didn’t even owe. The bank then proceeded to double his mortgage payments even as Delassus was probably still trying to figure out what the hell happened. (more…)

At Citigroup, shareholders had their say on CEO pay — and they yelled, “No damn way!”

Concerted action by shareholders, workers and public interest groups compelled corporate change in several other cases this spring as well.

At least three CEOs resigned. Executives truncated one shareholder meeting to 12 minutes. And across America and Europe, CEOs lamented the end of automatic approval for excessive executive compensation.

A wave of corporate change is rising because the rabble and the stockholders share an interest: decent corporate governance. To shareholders, decent means more long-term corporate vision providing reasonable returns and fewer risky, quick-profit schemes benefiting only executives. To workers, the unemployed, community and environmental groups, decent means operating corporations in the best interest of the nation, including treating workers with dignity and refraining from polluting. Together, the rabble and the shareholders wield power.

They’ll be exercising it inside and outside the ExxonMobil shareholder meeting next week. Some activist stockholders will seek approval of resolutions calling for the corporation to form a task force on climate change and to reduce greenhouse emissions. (more…)

When I paid my federal income taxes this year, I helped pay off the government bailout of big Wall Street banks. I paid my obligations, trusting government officials’ assertions that the bailout was essential to help fix the troubled economy. At the same time, I hoped the rescue would improve the banks’ sense of responsibility and loyalty to the people who bailed them out.

I didn’t expect that one of those same banks that I helped bail out would, in turn, play a role in locking me, and other union workers, out of a job.

That is exactly what happened in Sinking Spring, Pa., where Wells Fargo is destroying jobs by indirectly siding with an employer in a labor dispute.  Wells Fargo is a lender to Hofmann Industries, a steel tube fabricator that has locked 51 members of United Steelworkers Local 6996 out of their jobs for over a year. 

As union members, we were taking a stand against practices that were unjust. As we did, Wells Fargo slapped us in the face by extending a line of credit allowing Hofmann Industries to continue operations despite the lockout. With the help of Wells Fargo, Hofmann Industries resumed production with low-paid replacement workers.   Negotiations with the union have been sporadic, meaning the lockout has continued, and 57 breadwinners remain out of work.

In union attempts to contact Wells Fargo executives, response letters have said, “Wells Fargo does not intervene in matters between labor unions and employers.” It seems to me that they are interfering with this dispute already by choosing to fund Hofmann.

Wells Fargo refers to itself regularly as a “community based” financial institution, with its tagline “Together we’ll go far.” It needs to actually start supporting the community and working together with the 99 percent.

On April 24, I’ll be traveling to the Wells Fargo shareholder meeting to send a message to banks  that being a “community based” financial institution means supporting the people of that community, including its union members. We had their backs in the bailout, and we expect them to have ours now.

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…)