20 Reasons Why You Should Go After Bank of America With Us
Bank of America is BAD for America - let us count the ways in preparation for the BofA shareholder meeting on May 9. Read through 'em, get angry, and TAKE ACTION TODAY.
- Billions in Bailouts. Bank of America received $230.1 billion in taxpayer bailouts and other government sponsored backstops.1 While the bank has paid back some of this amount, including its $45 billion in TARP funds, it will most likely never have to return some of the remaining amount.
- $0 in Federal Income Taxes. Bank of America has not owed any federal income taxes for the past three years. On the contrary, since 2009, the bank actually reported a net tax benefit of $5.0 billion.2 One of the ways Bank of America is able to avoid paying its fair share of taxes is by using offshore subsidiaries that are registered in tax havens, like the Cayman Islands. As of 2008, Bank of America, Merrill Lynch, and Countrywide had 143 subsidiaries in known tax havens.3
- Gambling with Taxpayer Dollars. Last fall, Bank of America moved its risky derivatives from its investment bank into its FDIC-insured depository bank. That means that taxpayers are now on the hook for the risky bets that the bank placed with derivatives like credit default swaps.4
- Bank of America is Profiting off of Taxpayer-Backed Student Loans. Bank of America made taxpayer-backed student loans under the Federal Family Education Loan Program. These loans were especially profitable because they were risk-free to the bank—if borrowers defaulted, American taxpayers were on the hook for the losses. Bank of America securitized these loans and sold them to investors for a profit. Then when, the economy crashed, the U.S. Department of Education bailed the bank out buying up its soured student loans. Between 2008 and 2010, Bank of America received $4.8 billion in taxpayer money for these loans.5
- Foreclosure Leader. As of June 2010, Bank of America had $88 billion worth of foreclosed homes in its servicing portfolio—more than any other mortgage servicer in the country. The bank also owned $18.7 billion worth of foreclosed homes, the second highest in the nation.6
- Foreclosure Fraud. Bank of America is at the heart of the foreclosure fraud scandal. An executive at the bank admitted to robo-signing up to 8,000 foreclosure documents per month without reviewing the information in each file to ensure that the bank had a legal right to proceed with foreclosure.7 There have been numerous reports of Bank of America foreclosing on the wrong home.8
- Subprime Lending. Bank of America had a hand in the worst of the subprime lending excesses, providing financing to four of the five largest subprime lenders during the years prior to the crash. Together, these firms issued over $320 billion in subprime loans from 2005 through 2007.9
- Subprime Securitization. Following the Countrywide acquisition, BofA became the largest underwriter of mortgage-backed securities (MBS) in the country.10 Bank of America’s MBS business is now the subject of an $8.5 billion legal settlement that is being challenged by multiple Attorneys General for being too easy on the bank.11
- Loan modifications. Bank of American has one of the lowest conversion rates of any of the major servicers for putting homeowners with trial loan modifications into permanent ones under the Obama Administration’s Home Affordable Mortgage Program (HAMP).12
- Exploiting Military Members. The Department of Justice filed a lawsuit against a Bank of America subsidiary for wrongfully foreclosing on approximately 160 military service members. According to the DOJ, the bank was “knowingly and repeatedly violating the Service members Civil Relief Act.” Bank of America paid $20 million to settle the charges.13
- Federal lawsuit. The Federal Housing Finance Agency recently filed a lawsuit against 17 banks, including Bank of America, charging them with selling $196 billion in risky loans to Fannie Mae and Freddie Mac without adequate disclosure. Bank of America and its subsidiaries are accused of selling $57.4 billion worth, the highest of any of the banks.14
- Discriminatory Lending Practices. From 2006 through 2010, Bank of America (and mortgage lenders it has since acquired) was twice as likely to put Latino borrowers into higher-cost, subprime loans than white borrowers, and 147% more likely to do the same to African-American borrowers.15
- Exploiting Immigrants. Former employees have accused Bank of America of exploiting Latino customers who were recruited at embassies and community events. Employees were “coached” to push multiple products on unwitting customers who lacked knowledge of their hidden costs.16
- Predatory Lending. Countrywide Financial, which Bank of America now owns, was investigated in 2008 for predatory lending and securities fraud. In December 2011, Bank of America agreed to pay $335 million to settle charges of discriminatory lending. It is the largest discrimination settlement to date.17
- Payday Lending. Bank of America provides critical financing to Advance America, the largest payday lender in the country. The bank is the administrative agent for a $300 million line of credit that Advance America taps in order to fund its operations.
- Payday Lending. Bank of America and its subsidiaries own significant stakes (more than 1%) in four of the top five publicly held payday lenders: Advance America, EZCORP, Cash America, and Dollar Financial. In his most recent State of the Union Address, President Barack Obama named payday lending as an industry that is harmful to Americans and should be curtailed.
- Bank of Coal. Bank of America is the largest financier of dirty coal that fuels climate change. Nationally, coal pollution is responsible for 13,000 premature deaths, more than $100 billion in annual health costs, and more than 200,000 asthma attacks every year. Pollution from coal-fired power plants leads to smog, which can cause chest pain, coughing, and breathing difficulties and can make conditions like bronchitis, emphysema, and asthma worse or even fatal. Today, two out of every five U.S. families live in places with unsafe air.18
- Small Business Lending. Even though the bailout was intended to get banks to start lending again to stimulate the economy and spur job creation, Bank of America’s small business lending through the Small Business Administration’s flagship 7(a) program plummeted after the bailout. In the two years after the bailout, the bank made fewer than 500 SBA 7(a) loans across the country, compared to more than 14,000 in the two years prior—a 97% drop! The number of jobs funded by these loans fell 94%.19 Rather than participate in the SBA program, 96% of BofA’s small business lending is now in the form of credit card loans, that charge 16% to 23% interest instead of the 7-9% charged in SBA 7(a) loans.20
- Mass Layoffs. Bank of America announced up to 69,000 job cuts between 2004 and 2008.21 In early September 2011, Bank of America announced plans to eliminate another 30,000 jobs, more than 10 percent of its current workforce.22
- Forcing Taxpayers to Subsidize Low Wages. Of the companies whose employees qualify for and receive state health subsidies, BofA is the only financial services firm that regularly ranks in the top ten among states with public data. In some states, Bank of America employees and their dependents are among the top users of state-subsidized healthcare programs—costing taxpayers an estimated $45 million a year.23
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2 Bank of America 2012 10-K, http://www.sec.gov/cgi-bin/viewer?action=view&cik=70858&accession_number...
3 GAO-09-157, INTERNATIONAL TAXATION: Large U.S. Corporations and Federal Contractors with Subsidiaries in Jurisdictions Listed as Tax Havens or Financial Privacy Jurisdictions, Government Accountability Office, Dec 2008. Includes 115 Bank of America subsidiaries, 21 Merrill Lynch subsidiaries and 7 Countrywide subsidiaries.
5 http://federalstudentaid.ed.gov/ffelp/library/0809Purchases_101509.pdf; http://federalstudentaid.ed.gov/ffelp/library/0910Purchases_101310.pdf; http://fdlaction.firedoglake.com/2010/03/11/112-billion-student-loan-ind....
8 http://www.huffingtonpost.com/2011/06/27/retired-florida-foreclosure_n_8... http://www.huffingtonpost.com/2010/12/22/bank-of-america-breaking-into-h... http://www.huffingtonpost.com/2010/12/08/homeowners-wrongfully-foreclose... http://www.huffingtonpost.com/2010/10/06/banks-foreclosure-break-in_n_75... http://articles.sun-sentinel.com/2010-09-23/business/fl-wrongful-foreclo...
10 “Bookrunners of US MBS in 2007,” Asset-Backed Alert, 31 Dec 2007, accessed on 29 Feb 2008.
12 http://www.treasury.gov/initiatives/financial-stability/results/MHA-Repo..., page 14
15 Based on data from the Home Mortgage Disclosure Act Database.
17 Nasiripour, Shahien, “BofA to pay $335m over discrimination claims.” Financial Times, December 21, 2011, http://www.ft.com/cms/s/0/c65efdb4-2c1e-11e1-b7df-00144feabdc0.html#ixzz...
19 Based on data from the Small Business Administration.
20 Based on CRA data from FFIEC.gov
23 Updated previous methodology with FY2009 numbers (previous methodology used FY2007).