Bank Of America's Lay-Offs Threatens Charlotte's Economy; The Countrywide Curse!

Bank of America Confirms 30,000 Jobs to Go

Bank of America’s chief executive, Brian T. Moynihan, vowed on Monday to eliminate $5 billion in costs annually by 2014, a move that will eliminate at least 30,000 jobs at the company, which employs 288,000 people and is the largest bank in the United States.

In a widely anticipated speech at an investor conference organized by Barclays in New York, Mr. Moynihan outlined his plan to make Bank of America, the largest bank in the United States, more efficient and profitable even if that means sacrificing scale. “We don’t have to be the biggest company out there,” he said. “We have to be the best.”

While he did not specify the number of jobs that might be involved, the company announced shortly after his speech that 30,000 jobs are to be eliminated under the company’s Project New BAC cost-cutting initiative. The initial recommendations by the architects of New BAC, which takes its name from the company’s ticker symbol, were reviewed last Thursday and Friday by the company’s top management in Charlotte, N.C.

“As the decisions are implemented, employment levels in the areas under review during Phase I are expected to be reduced by approximately 30,000 jobs over the next few years,” the bank said in a statement. “The company expects that attrition and the elimination of appropriate unfilled roles will be a significant part of the anticipated decrease in jobs.”

The first part of New BAC involves the consumer banking operations of the company, as well as its home loan, technology and support operations. Other parts of the business, including Bank of America Merrill Lynch, will be reviewed in the second phase, which begins in October and continues through March 2012.

Out of $73 billion in annual expenses, Mr. Moynihan aims to cut at least $5 billion by shutting some of its 63 data centers, eliminating overlapping deposit systems and trimming layers of back-office staff accumulated during the acquisition binge undertaken by his predecessor, Ken Lewis.

“It’s taking out work we don’t need to do any more, and getting it out of the company,” he said. “We’re a much simpler company than we were 24 months ago.”

While the speech fell short of the bold blueprint many analysts and investors had been hoping for, Bank of America shares rose in early trading by 1.1 percent to $7.06.

It has been a very busy summer for Mr. Moynihan. In the last few weeks, the company has announced a management shake-up, a $5 billion investment by Warren E. Buffett and the sale of more than $15 billion in assets.

None of those major news events have propped up the bank’s battered stock, which is down nearly 30 percent since the beginning of August.

During the question-and-answer part of the session, Mr. Moynihan was asked whether Bank of America had been asked by the federal regulators to raise capital at the time of Mr. Buffett’s investment. Mr. Moynihan said they had not.

A shareholder asked him: “Can you or would you bankrupt Countrywide?” Mounting losses at Countrywide Financial are still plaguing the bank, three years after Bank of America bought it for $2.8 billion when Countrywide nearly collapsed into bankruptcy as its financing dried up.

Mr. Moynihan answered that in dealing with the troubled mortgage giant, the bank “looks at all our options on everything.”

When the questioner followed up by asking Mr. Moynihan if he was saying that bankrupting Countrywide was a viable option, Mr. Moynihan again demurred. “There are options around all this stuff that we continue to work on,” he said.

Angry investors are trying to force Bank of America, and other large banks, to buy back billions of dollars worth of mortgages that have defaulted, arguing that the home loans did not conform to the original underwriting standards or were originated with little evidence of adequate assets on the part of borrowers.

In other cases, investors including the federal government and the insurance giant A.I.G. want to recover tens of billions of dollars from the big banks for losses on securities they assembled from now-troubled subprime mortgages.

Then there is the investigation by state attorneys general into mortgage servicing abuses, which could cost the big banks more than $20 billion in a proposed settlement that so far they’ve been unable to finalize. “The attorneys generals settlement is part of what can move us forward, but the settlement has to be reasonable for the company and reasonable for shareholders,” Mr. Moynihan said.


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Sources: Associated Press, Charlotte Magazine, Forbes, NY Times, Youtube, Google Maps

Standard & Poor's Role In 2008 Market Crash Possibly Criminal; Investigation Needed!

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Senate report on Wall Street crash: The criminalization of the American ruling class

The US Senate Permanent Subcommittee on Investigations released a voluminous report last Wednesday on the Wall Street crash of 2008 that documents the fraud and criminality that pervade the entire financial system and its relations with the government.

The 650-page report is the outcome of a two-year investigation that involved over 150 interviews and depositions as well as the examination of subpoenaed emails and internal documents of major banks, government regulatory agencies and credit rating firms. The report, entitled “Wall Street and the Financial Crisis: Anatomy of a Financial Collapse,” establishes that the financial crash and ensuing recession were the result of systemic fraud and deception on the part of the mortgage lenders and banks, carried out with the collusion of the credit rating corporations and the complicity of the government and its bank regulatory agencies.

The World Socialist Web Site will analyze the contents of this important document in detail in the coming days. However, its basic thrust is clear. As the executive summary states: “The investigation found that the crisis was not a natural disaster, but the result of high-risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.”

At a press conference Wednesday and in subsequent interviews, Senator Carl Levin (Democrat from Michigan), the chairman of the subcommittee, was even more explicit. “Using emails, memos and other internal documents,” he said, “this report tells the inside story of an economic assault that cost millions of Americans their jobs and homes, while wiping out investors, good businesses and markets. High-risk lending, regulatory failures, inflated credit ratings and Wall Street firms engaging in massive conflicts of interest contaminated the US financial system with toxic mortgages and undermined public trust in US markets.

“Using their own words in documents subpoenaed by the subcommittee, the report discloses how financial firms deliberately took advantage of their clients and investors, how credit rating agencies assigned AAA ratings to high-risk securities, and how regulators sat on their hands instead of reining in the unsafe and unsound practices all around them. Rampant conflicts of interest are the threads that run through every chapter of this sordid story.”

Levin went on to say that the investigation had found “a financial snake pit rife with greed, conflicts of interest, and wrongdoing.” He told the New York Times: “The overwhelming evidence is that those institutions deceived their clients and deceived the public, and they were aided and abetted by deferential regulators and credit ratings agencies who had conflicts of interest.”

The report is divided into four sections, each focusing on a different contributor to the network of fraud and abuse: the mortgage lenders, the regulators, the credit rating firms and the Wall Street investment banks. The first section takes Washington Mutual (WaMu) as its case history, detailing the predatory and deceptive lending practices and accounting and reporting subterfuges that led, following the implosion of the subprime mortgage market, to the bank’s collapse and takeover by JPMorgan Chase in September of 2008.

The second examines the corrupt role of the federal Office of Thrift Supervision (OTS), which oversaw three of the biggest financial failures in US history—Washington Mutual, IndyMac and Countrywide Financial. “Over a five-year period from 2004 to 2008,” the report states, “OTS identified over 500 serious deficiencies at WaMu, yet failed to take action to force the bank to improve its lending operations and even impeded oversight by the bank’s backup regulator, the FDIC.”

The third section documents the systematic manner in which the rating firms Moody’s and Standard & Poor’s gave top credit ratings to collateralized debt obligations (CDOs) and other complex securities backed by subprime and other toxic mortgages, enabling the banks to make billions of dollars by palming off these junk securities as top-grade investments. In return, the rating companies raked in huge profits for their services.

As the report states: “Credit rating agencies were paid by Wall Street firms that sought their ratings and profited from the financial products being rated… The ratings agencies weakened their standards as each competed to provide the most favorable rating to win business and greater market share. The result was a race to the bottom.”

The final section examines the fraud and deception perpetrated by the major investment banks as they profited first from the inflation of the US housing market and then from its implosion. It takes as its examples Goldman Sachs and Deutsche Bank. Goldman began betting heavily in 2007 that the housing market would collapse, packaging and selling subprime mortgage-backed CDOs even as it secretly bet that the same securities would plummet in value.

The report cites emails by Deutsche Bank’s top global CDO trader, Gregg Lippman, calling risky mortgage securities marketed by the bank “crap” and “pigs” and the bank’s operations a “CDO machine,” which he characterized as a “Ponzi scheme.”

The document points to the central role of the big Wall Street banks in promulgating the fraud, stating: “Investment banks were the driving force behind the structured finance products that provided a steady stream of funding for lenders originating high-risk, poor-quality loans and that magnified risk throughout the US financial system. The investment banks that engineered, sold, traded and profited from mortgage-related structured finance products were a major cause of the financial crisis.”

The overall picture is one of criminality on the part of the entire financial establishment that, with all levels of government serving as its co-conspirator, systematically looted the economy in order to further enrich itself. The result is a social tragedy for tens of millions of people in the US and many millions more around the world. And yet, the result of this historic crime is that the bankers and speculators are richer and more powerful than ever.

Not a single senior executive at a major US bank, hedge fund, mortgage firm or insurance company has gone to jail. Not one has even been prosecuted.

There is every indication that none will be criminally indicted in the future. As with the similarly damning report released in January by the US Financial Crisis Inquiry Commission, the Senate report has been largely buried by the mass media. It was reported perfunctorily on the inside pages of some of the major newspapers and barely mentioned by the broadcast and cable networks, and then dropped.

One day after the release of the Senate report, the New York Times published a long article on the failure to prosecute any of the Wall Street criminals. It recounted a private meeting between the then-president of the Federal Reserve Bank of New York (now Obama’s treasury secretary) Timothy Geithner and then-New York Attorney General Andrew Cuomo in October 2008 at which Geithner urged Cuomo to back off on investigations of the banks and rating agencies.

The article contrasted the absence of criminal charges against bankers today with the aftermath of the savings and loan debacle of the late 1980s, when government task forces referred 1,100 cases to prosecutors and more than 800 bank officials went to jail. It noted the precipitous decline in referrals by bank regulators to the FBI, from 1,837 cases in 1995 to 75 in 2006. Over the ensuing four years, at the height of the financial crisis, an average of only 72 a year have been referred for criminal prosecution.

The Office of Thrift Supervision has not referred a single case to the Justice Department since 2000, and the Office of the Comptroller of the Currency, a unit of the Treasury Department, has referred only three in the last decade.

How is this to be explained? Why are Goldman CEO Lloyd Blankfein, JPMorgan CEO Jamie Dimon, the former CEO of Washington Mutual, Kerry Killinger, as well as Treasury Secretary Geithner and his predecessor, Henry Paulson (previously CEO of Goldman), not in prison?

Such financial manipulators are being shielded while workers are being stripped of their jobs, wages, homes and basic social services to pay for the debts resulting from the transfer of trillions in public funds to the banks. Collective resistance to this attack is being criminalized in the form of anti-strike laws, imposing fines and jail terms for workers who fight back.

One reason for the absence of prosecutions is the power of the individuals involved, all of whom wield immense influence over politicians, the media and the legal system. But it goes deeper than the status of individuals, just as the sordid state of affairs as a whole arises not from individual greed, but rather from a profound crisis of the entire system.

The criminalization of the American ruling class is the outcome of more than three decades in which the accumulation of wealth by the corporate-financial elite has become increasingly separated from real production. In its pursuit of profit, the ruling class has dismantled huge sections of industry and turned ever more decisively to financial manipulation and speculation.

The ascendancy of the most parasitic sections of the capitalist class has been accompanied by a sharp decline in the living standards of the working class. The richest and most powerful layers have acquired staggering levels of wealth by plundering society.

The ruling class itself senses that to prosecute any of the leading figures in the defrauding of the American people (and the rest of humankind) would rapidly expose the criminality of the entire system. It would mean putting the capitalist system itself on trial.


Sources: AP, MSNBC, World Wide Socialist

GOP Spending Cuts Hurts Poor Black People Most: Two Americas!

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Visit msnbc.com for breaking news, world news, and news about the economy

Them That’s Not Shall Lose

“Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor.”

James Baldwin penned that line more than 50 years ago, but it seems particularly prescient today, if in a different manner than its original intent.

Baldwin was referring to the poor being consistently overcharged for inferior goods. But I’ve always considered that sentence in the context of the extreme psychological toll of poverty, for it is in that way that I, too, know well how expensive it is to be poor.

I know the feel of thick calluses on the bottom of shoeless feet. I know the bite of the cold breeze that slithers through a drafty house. I know the weight of constant worry over not having enough to fill a belly or fight an illness.

It is in that context that I am forced to assume that if Washington politicians ever knew the sting of poverty then they have long since vanquished the memory. How else to qualify their positions? In fact, according to the Center for Responsive Politics, nearly half of all members of Congress are millionaires, and between 2008 and 2009, when most Americans were feeling the brunt of the recession, the personal wealth of members of Congress collectively increased by more than 16 percent. Must be nice.

Poverty is brutal, consuming and unforgiving. It strikes at the soul.

You defend yourself with hope, hard work and, for some, a helping hand. But these weapons grow dull in an economy on the verge of atrophy, in a job market tilting ever more toward the top and in a political environment that would sacrifice the weak to the wealthy.

On Thursday, the Pew Research Center released a poll that showed how disillusioned low-income people have become. Those making less than $30,000 were the most likely to expect to be laid off or be asked to take a pay cut. Furthermore, they were the most likely to say that they had trouble getting or paying for medical care and paying the rent or mortgage.

But at least those numbers include people with incomes. A vast subset is chronically unemployed and desperately searching for work. According to the Consumer Reports Employment Index, “In 23 of the past 24 months, lower-income Americans have lost more jobs than they have gained.” It continues, “Meanwhile, more affluent Americans seem to be gaining more jobs than they are losing.”

And the current election-cycle obsession to balance the books with a pound of flesh, which is being pushed by pitiless Republicans and accommodated by pitiful Democrats, will only multiply the pain.

Until more politicians understand — or remember — what it means to be poor in this country, we are destined to fail the least among us, and all of us will pay a heavy price for that failure.

Sources: ABC News, Fox News, HLN, MSNBC, NY Times, Youtube

Credit Reporting Agency Monopolies Destroy Lives! Millions Held Hostage! (Videos)

Credit Error? It Pays to Be on V.I.P. List

The credit rating bureaus, whose reports influence everything from credit cards to mortgages to job offers, have a two-tiered system for resolving errors — one for the rich, the well-connected, the well-known and the powerful, and the other for everyone else.

The three major agencies, Equifax, Experian and TransUnion, keep a V.I.P. list of sorts, according to consumer lawyers and legal documents, consisting of celebrities, politicians, judges and other influential people. Those on the list — and they may not even realize they are on it — get special help from workers in the United States in fixing mistakes on their credit reports. Any errors are usually corrected immediately, one lawyer said.

For everyone else, disputes are herded into a largely automated system. Their complaints are often electronically ferried to a subcontractor overseas, where a worker spends, on average, about two minutes figuring out the gist of the matter, boiling it down to a one-to-three-digit computer code that signifies the problem — “account not his/hers,” for example — and sending a dispute form to the creditor to investigate. Many times, consumer advocates say, the investigation translates to a perfunctory check of its records.

“The legal responsibility of the credit reporting agencies and of the creditors is well established,” said Leonard Bennett, a consumer lawyer in Newport News, Va. “There is a requirement that they do meaningful research and analysis, and it is almost never done.”

Consumers who have trouble fixing errors through the dispute process can quickly find themselves trapped in a Kafkaesque no man’s land, where the only escape is through the court system.

“You are guilty before you are proven innocent in a situation like this,” said Catherine Taylor, 45, of Benton, Ark., who said she had been denied employment and credit because her filing was mixed up with a felon who had the same name and birthday.

Judy Johnson of Bossier City, La., was confused with a less creditworthy Judith Johnson, with a similar address and Social Security number. For nearly seven years, Judy Johnson, a 63-year-old credit manager for a building supply company, said she tried to remove the black marks from her credit report. But when she was denied a credit card, she knew the problem had returned — a third time. “This time, I was livid,” she said.

She ultimately brought a suit against one of the bureaus, and recently settled for an amount she cannot disclose. But the problems still linger. A deputy sheriff recently came to her door to serve her papers for a debt she says she does not owe.

The credit rating bureaus, private-sector companies that each attempt to track all American consumers’ credit use, have grown much more powerful over the last couple of decades as credit has become a crucial cog in the nation’s financial system. Their reports are used to formulate the all-powerful credit score, which lenders use to determine creditworthiness.

But as the bureaus’ work has become more important, consumer advocates say, regulation has not kept up, in large part because their overseer, the Federal Trade Commission, lacks broad authority. That could change once responsibility for the credit bureaus shifts to the new Consumer Financial Protection Bureau, which will be able to write rules and examine the credit agencies’ policies.



The bureaus, meanwhile, do not have an economic incentive to improve the system, consumer advocates say, because their main customers are the creditors, not consumers.

“There is no neutrality in the credit reporting agencies,” said John Ulzheimer, who has been an expert witness in more than 80 credit-related cases and is president of consumer education at SmartCredit.com. “They work for the lenders who buy credit reports from them, and anyone who suggests otherwise is not being intellectually honest.”

When asked about the V.I.P. category, TransUnion said all consumers “have the ability to speak to a live representative.” Equifax said consumers who received a free copy of their credit report were provided with a number for customer service.

Experian denied that it had V.I.P. lists. But a spokeswoman did say that prominent people deemed high risk — like politicians in an election year — might have their credit files taken offline so that creditors or other companies making inquiries could not get access without the bureau’s permission. Experian said those people did not receive any other special handling.

David Szwak, a consumer lawyer in Shreveport, La., who has handled dozens of credit cases, said that the V.I.P. designation and preferential treatment did exist at Experian, and he provided sworn testimony from former Experian employees that the category existed.

Estimates of credit reports with serious errors vary widely, anywhere from 3 to 25 percent. A recent study, paid for by the Consumer Data Industry Association, the trade group for the bureaus, found potential errors in 19.2 percent of reports, but said that less than 1 percent of them had disputes that, when settled, resulted in a meaningful increase in scores. Even 1 percent translates into millions of consumers, since there are at least 200 million files at each of the bureaus.

The F.T.C. is expected to deliver a nationwide study on credit report accuracy next year that could provide more clarity. It could also include recommendations for legislative action.



The volume of disputes has been rising as consumers borrow more and gain greater access to credit reports. The automated system was a response to that. A spokesman for the trade group said most consumers received an answer within 14 days.

Experian is the only bureau that still processes disputes in the United States, experts said, though most complaints wind their way through the same online system — unless the dispute involves a V.I.P.

“They get a lot more high-end treatment,” said Mr. Szwak, the lawyer, who has read the bureaus’ internal procedure manuals and deposed or cross-examined employees. The biggest difference at TransUnion and Equifax, lawyers said, is that V.I.P.’s disputes are specially handled domestically. Regular consumers’ files, meanwhile, may get priority treatment if they involve a time-sensitive issue, like a mortgage pending, or if the consumer is represented by a lawyer or dealing with fraud.

Last year, new rules went into effect to strengthen existing regulations on the accuracy of reports. The rules also allow consumers to dispute errors directly with the creditor. But critics say the rule lacks any teeth because consumers don’t have the right to sue the companies. (Individuals can, however, sue the bureaus and creditors after lodging a dispute through their system.)

But the problem, advocates say, is that consumers cannot vote with their feet. “They cannot remove their information from the bureaus,” said Chi Chi Wu, a staff lawyer at the National Consumer Law Center, who wrote a report on the automated dispute process in 2009, “or take their business elsewhere.”


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Sources: NY Times, Wikipedia, Youtube, Google Maps

Bank Of America & Countrywide's $8.5B Settlement Jeopardizes Homeowners (More Foreclosures)

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Bank of America settlement could speed foreclosures


Investors who bought bonds backed by shaky loans scored a major victory Wednesday with the announcement that Bank of America will pay more than $8 billion to make up for some of their losses.

Homeowners on the other end of those shaky mortgages — especially those most at risk of foreclosure — may have less to cheer about.

In the largest settlement to date related to the rogue mortgage lending wave, Bank of America said Wednesday it would pay $8.5 billion to settle claims with investors holding about $100 billion worth of mortgage-related securities sold by its Countrywide unit. The winners include 22 large investors such as Pimco, Metropolitan Life and BlackRock, as well as the Federal Reserve Bank of New York.

Aside from their claims that Countrywide sold them bonds backed by faulty loans, the investors argued that by continuing to service bad loans rather than speeding up foreclosures, the Bank of America unit ran up servicing fees, profiting at the expense of investors.

As a result the settlement includes a promise to hire additional “subservicers” to speed up the foreclosure process for high-risk loans. That means Bank of America borrowers whose foreclosure have been on hold may now see the process accelerated.

“Living with the uncertainty of foreclosure can’t be a pleasant experience,” said Bank of America spokesman Jerry Dubrowski. “The sooner we can deal with that overhang the better for the economy.”

Bank of America also faces considerable uncertainty as it continues to try put its mortgage woes behind it.

While the bank said its settlement would resolve "nearly all" its exposure related to mortgages issued by Countrywide, only holders of about a quarter of the securities have agreed to support the deal. Hundreds of investors holding an additional $300 billion worth of securities have yet to agree to the settlement, which also is subject to court approval. There are no guarantees that the remaining investors will go along.

“It is not possible to predict whether and to what extent challenges will be made to the settlement or the timing or ultimate outcome of the court approval process,” Bank of America said in its press release announcing the settlement.

At the height of the boom, rising home prices allowed mortgage originators to replace failed loans with freshly written performing mortgages. Lenders, investors and borrowers all assumed that there was little risk in churning out new mortgages — even if they were based on flawed information — because even if a loan defaulted, the rising value of the home securing it would minimize any potential losses.

But when home prices began falling, many of those bad loans came back to haunt the companies that had underwritten them. With demand for new mortgages drying up, there weren’t enough new loans to replace the ones that were going bad.

Now investors holding bad mortgages are demanding that lenders buy them back. Those investors include government-controlled lending giants Fannie Mae and Freddie Mac. In January, Bank of America paid $2.8 billion to Freddie and Fannie to buy back mortgages.

Bank of American concede in its press release Wednesday that that it “is not currently able to reasonably estimate” how much more it may have to pay to the two entities for losses on mortgage investments.

It’s also still not clear just how big the mounting losses on mortgage investments will be. With home prices still falling and mortgage defaults rates high , losses on foreclosed homes are hitting even those investors holding top-rated bonds. The ultimate cost of the claims will depend on how many more homes are lost to foreclosure and how much further home prices fall.

Bank of America also faces a potentially large payout to all or some of the 50 state attorneys general, who have been investigating abuses by the biggest mortgage servicers. The state officials are pressing the largest banks, including Bank of America, to pay up to $30 billion in fines and penalties. If a unified settlement can’t be reached, Bank of America could face multiple legal challenges from states that decide to pursue claims on their own.


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Sources: CNBC, MSNBC, Google Maps

Bank Of America Prepares For Assange's Wikileaks Attack

Bank of America Executive: We're Preparing For Wikileaks


A senior Bank of America executive Wednesday suggested the company is prepared to deal with a possible release of internal documents by WikiLeaks in part because the bank has been through similar public disclosures before.

Anne Finucane, head of global strategy and marketing for Charlotte-based Bank of America, said in a speech in Boston that the company has already endured grueling government investigations that resulted in the public release of executives' e-mails and other internal documents.

"I don't think there's a company that has had more leaks, more of our information provided to congressional hearings, attorneys general ... etc.," said Finucane, referring to investigations by Congress and regulators over its controversial acquisition of failing investment bank Merrill Lynch in January 2009.

"We have been out there pretty much 24-7, whether those of us who run communications like it or not, and we have learned not only to react, but deal with this as a given," she added.

Among the material that came out during a congressional investigation of Bank of America's Merrill acquisition was an e-mail one bank director wrote to another director about the company's decision to slash its dividend: "Unfortunately, it's screw the shareholders!!" Another note by the same director suggested the company was forced by the government to complete the Merrill deal.

In February, Bank of America agreed to settle a separate investigation with the U.S. Securities and Exchange Commission that it failed to properly disclose to investors the size of losses at Merrill Lynch, as well as bonuses Merrill employees would be receiving. The company agreed to pay $150 million and strengthen its corporate governance and disclosure practices.

Finucane spoke Wednesday before a women's networking breakfast sponsored by the Greater Boston Chamber of Commerce. She made only a fleeting reference to the brewing controversy with WikiLeaks and spoke mainly about how Bank of America tried to respond to the financial crisis, as well as of her own career path to one of the top jobs in the nation's largest bank.

WikiLeaks founder Julian Assange told Forbes magazine last month that the nonprofit group, which released a huge cache of sensitive U.S. diplomatic correspondence this week, plans to release thousands of documents from a major U.S. bank early next year, spurring speculation that Bank of America could be the target.

Assange did not identify the bank. But in a separate interview 13 months ago, Assange told Computerworld magazine that his organization had obtained a five-gigabyte hard drive from an unidentified Bank of America executive. Still, Bank of America said it has no contact with WikiLeaks and is unable to verify the assertion that WikiLeaks has an employee's hard drive.

"We can assume it's us, but we don't know it's us, because we've had no further evidence beyond what we have read and heard," Finucane said.

Finucane is the only member of Bank of America's senior executive committee based in Boston. Chief executive Brian Moynihan lives in Massachusetts, but is officially based in Charlotte.

Finucane's responsibilities include overseeing Bank of America's vast philanthropic efforts. In her speech Wednesday, she said Bank of America has several priorities for its charitable giving: economic development, cultural institutions, and social services. For instance, Finucane noted the bank recently donated $10 million to the Museum of Fine Arts in Boston, which just opened a new wing to public acclaim.

Overall, Bank of America has said it plans to give away about $12 million by the end of this year to nonprofit organizations and other groups in Massachusetts, up from $9 million a year six years ago when it acquired FleetBoston, then New England's largest bank.

"Happily, we have been able to increase our community relations and philanthropy over the last several years," Finucane said.






Exclusive: WikiLeaks Will Unveil Major Bank Scandal


First WikiLeaks spilled the guts of government.

Next up: The private sector, starting with one major American bank.

In an exclusive interview earlier this month, WikiLeaks founder Julian Assange told Forbes that his whistleblower site will release tens of thousands of documents from a major U.S. financial firm in early 2011. Assange wouldn’t say exactly what date, what bank, or what documents, but he compared the coming release to the emails that emerged in the Enron trial, a comprehensive look at a corporation’s bad behavior.


Read on....“WikiLeaks’ Julian Assange Wants To Spill Your Corporate Secrets”.


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Sources: Boston.com, CNBC, Emirates247, Forbes.com, Life.com, McClatchy Newspapers, Young Turks, WCNC, Wikipedia, Youtube, Google Maps

BOFA Claims It Will "Really" Begin To Help Homeowners

Bank Of America Vows To Do More For Harried Borrowers


Bank of America Corp.'s top mortgage executive will tell a Senate panel today that the Charlotte bank is taking steps to improve loan modification and foreclosure processes that have confounded many struggling borrowers.

Among the changes, the nation's biggest Mortgage Servicer has started giving borrowers a single point of contact in the modification process, Barbara Desoer says in written testimony submitted to the Senate Banking Committee. Homeowners often complain about being passed from department to department when they're seeking agreements to reduce their payments.

The bank is also looking to change an industrywide practice of considering a borrower's modification request, while also taking steps toward foreclosure, she says. This so-called "dual-track" system has led to incidents in which borrowers face foreclosure proceedings even as they're working out modifications.

Bank of America doesn't "claim perfection," Desoer says in her prepared remarks, but continues to "put forward solutions that respond to customer needs."

The bank is working with state attorneys general and other parties as it makes changes to its approach, Desoer says. Last week, bank executives were in Iowa for discussions with state officials who are leading a probe of foreclosure practices at the nation's biggest lenders. N.C. Attorney General Roy Cooper and some of his peers have indicated that changes to modification programs may be a potential remedy.

Desoer and a JPMorgan Chase & Co. mortgage executive are likely to face tough questions from senators angered over allegations that banks employed so-called "robo-signers" who rapidly approved foreclosure documents without properly reviewing them. Iowa Attorney General Tom Miller is also on the witness list.

Bank of America became the nation's largest mortgage servicer in 2008 when it bought ailing Countrywide Financial Corp. It now administers about 14 million customer loans - about one in five U.S. mortgages.

More than 86 percent of Bank of America customers are current on their loans and making their payments, Desoer notes. But the bank has had to focus extensively on the portion of customers in default or struggling to make payments. Of the 14 million loans, about three-fourths are owned by investors such as Fannie Mae and Freddie Mac, complicating efforts to reach modification agreements.

As it looks to improve the modification process, the bank has assigned 140,000 customers a single case manager to handle questions, according to Desoer's testimony. Wells Fargo has said it will implement a similar approach for certain Wachovia customers as part of a settlement announced last month. The San Francisco-based bank has also said it's providing a single point of contact to customers who make new modification requests.

Among other changes, Bank of America is looking to create a "customer status checklist" that will show customers where they stand in the process. The bank also plans to double its staff that works with customers face-to-face either at Bank of America offices or alongside nonprofit groups. Other steps may come up in the bank's "constructive and continuing conversations" with Miller and other attorneys general, Desoer says.

Meanwhile, Bank of America has halted foreclosure sales in 50 states as it reviews its processes. The bank believes the basis for all of its foreclosures has been accurate, but it has identified "areas for improvement," Desoer says. The bank has changed its affidavit forms, installed extra quality control checks and changed procedures for hiring outside lawyers. "Every affidavit will be individually reviewed by the signer, properly executed and promptly notarized," she says.











Moynihan "Surprised" By N.Y. Fed Letter


Bank of America Corp. chief executive Brian Moynihan said he was surprised when the Federal Reserve Bank of New York and investors sent a letter pushing the firm to repurchase soured mortgages pooled into securities.

The bank expects to resolve the dispute, which could pressure Bank of America to foreclose on borrowers more quickly, Moynihan, 51, said Thursday in Boston at a presentation to banking analysts.

"I don't think we should be put in a position where we aren't trying to help homeowners through this strife because people want us to foreclose faster," he said.

Bank of America shares declined 4.4 percent on Oct. 19 after news of the letter signed by the New York Fed, Pacific Investment Management Co., BlackRock Inc. and others, alleging the bank's Countrywide Financial Inc. subsidiary didn't service loans properly. The New York Fed acquired mortgage debt through its 2008 rescues of Bear Stearns Cos. and American International Group Inc.

"The fact that they signed the letter from your standpoint surprised you, it surprised me, and it is a surprise to a lot of people," Moynihan said, referring to the bondholders. "We have disputes with them about other assets in those pools and we've resolved them."

Bank of America, the largest U.S. lender, has said it has formal outstanding demands from mortgage investors seeking repurchases of almost $13 billion of loans that may have failed to accurately document key data, such as income and home values.

The Charlotte-based bank is also among lenders facing being investigated by state attorneys general over its handling of foreclosures.

Moynihan said he called BlackRock Inc. CEO Larry Fink to discuss the dispute.
Bank of America said Wednesday it would reduce its 34 percent stake in BlackRock, preferring to use the capital for its own businesses. The bank will remain a strategic partner of BlackRock, the world's largest asset manager, for a long time, Moynihan said.

The bank said last month it would start resubmitting foreclosure affidavits in 102,000 cases in which judgment is pending. Amid pressure from lawmakers and state officials, bankers have delayed action in order to review filings that some borrowers claim were marred by so-called robo-signing, in which employees vouched for the accuracy of court statements without personally checking loan records.

The mortgage-bond investor group including BlackRock says Bank of America's foreclosures take too long because of missing documents, processing mistakes and insufficient staffing to evaluate borrowers for loan modifications, Kathy Patrick, their lawyer at Gibbs & Bruns LLP, said Oct. 19.

Moynihan responded Thursday to a question on whether Bank of America would consider a bankruptcy of Countrywide to limit potential losses from distressed home loans.
"We don't see any liability that would make us think differently about working through this in the ways we are working through this," he said.





Did Bank Of America Try To Buy DNC 2012 With Loan?

Pajamas Media roots into FEC filings to discover that Bank of America loaned the Democratic National Committee and the Democratic Congressional Campaign Committee $32m. last month while asking for nothing more than future contributions as collateral. Such de facto mailing list valuations are an extremely flimsy basis for securing a loan. PJM asks:

Were the Bank of America deals legitimate, arms-length transactions, or were they cozy sweetheart deals in which nothing was really put up to secure a $32 million loan?

But one question not asked is the connection between the loan and Charlotte’s ongoing pursuit of the DNC’s 2012 convention. We already know that BAC CEO Brian Moynihan has been called President Obama’s favorite banker and that the bank’s exec team — like the rest of the Uptown crowd — is full-on behind landing the convention for Banktown USA. Plus we have ample local precedent for BAC throwing millions in sweetheart loans at favored endeavors — the US National Log Flume Ride and France Family Convention Center Annex being two glittering, irrefutable examples.

BAC has yet to respond to PJM inquires with details about the loans — but you know what is coming. BAC will say there is a legit business purpose to the loans and any suggestion to the contrary is counter-factual.




Did The DNC Get an Illegal Campaign Loan from Bank of America? (PJM Exclusive)

Shortly after Labor Day, as polls continued to sink, the Democratic National Committee (DNC) realized it needed a cash infusion for the upcoming midterm elections.

Its chairman, former Virginia Governor Tim Kaine, turned to the Bank of America to secure a $15 million revolving credit line. Then, in the middle of this month, the Democratic Congressional Campaign Committee (DCCC) got another loan from BofA for an additional $17 million.

What was their collateral? It turns out, not much.

The DNC claims their collateral was an intangible piece of property — its donor mailing list. The DCCC only cites unnamed “assets.” Neither party organization possesses real estate even close to cover the $32 million. The DNC’s headquarters is owned by another entity. Even it was put up as collateral, its market value was last estimated at only $13.7 million.

Were the Bank of America deals legitimate, arms-length transactions, or were they cozy sweetheart deals in which nothing was really put up to secure a $32 million loan?

And if it was the latter, could it be considered an illegal campaign contribution from the largest bank holding company in America?

There also is troubling evidence that two days before closing on the loan transaction, the DNC changed its own privacy provisions to allow the selling or sharing of private donor data.

BofA has been a longtime friend of Democrats. In the 2008 election cycle, BofA gave its largest single campaign contribution to then-Senator Barack Obama. According to Bloomberg News, BofA’s new CEO, Brian Moynihan, is considered Obama’s top political ally on Wall Street.

On the eve of the midterm elections, the appearance of preferential loans from cozy Wall Street bankers could play badly with the electorate. What message does a largely unsecured $32 million credit line for the Democratic Party send to thousands of cash-starved small businesses across the nation who can’t secure any credit even with tangible assets?

The findings are part of an exclusive Pajamas Media investigation.

The DNC Loan Agreement as posted online by the Federal Election Commission (FEC) and signed by former Virginia Governor Tim Kaine (D) on September 16, 2010, says the loan collateral included: “All electronic mail (‘E-mail’) addresses and other contact lists, records and other Information (electronic or otherwise) relating to contributors, supporters and subscribers owned by any of the Borrowers.” The borrowers in this case were the DNC and the DNC Services Corporation.

The loan agreement further stipulates that if the Democrats defaulted, Bank of America would be entitled to “proceeds from any fundraising activity, refunds, reimbursements, or proceeds from the rental or sale of mailing, contact or subscription lists or Information (electronic or otherwise).”

One key to understanding the problems behind the $15 million loan is determining what the donor list is actually worth. The DNC filings with the FEC do not attach any independent appraisal documents or list broker evaluations to establish the list’s fair market value.

Senator John McCain once tried to use his presidential donor list as collateral for a loan. He valued his Republican donor list as worth $3 million. The bank rejected the loan.

Trying to fix a value on an intangible mailing list is very difficult.

“Donor lists do have value, but very fleeting value,” Ken Boehm, chairman of the National Legal and Policy Center, told Pajamas Media. “Lists do deteriorate and $15 million is an awful lot of money. So if the bank ends up with the list because the party is broke, where are they going to get their money?”

A senior executive who is part of a national U.S. bank told Pajamas Media that a data list would be a weak basis for a $15 million loan. He gave his comments on the grounds that he would not be publicly identified. He said he was “somewhat skeptical of a donor list as adequate collateral for a $15 million credit line.”

But if the value is not $15 million, it could be considered a substantial campaign contribution to the Democratic National Committee. And that could be illegal.

“The DNC would have to demonstrate it’s an arms-length, commercially reasonable, properly collateralized loan,” says Cleta Mitchell, a Washington-based attorney with Foley & Lardner LLP and an expert on campaign finance law. She says there needed to be some outside way to assess or appraise the list before the line of credit could be approved. “Otherwise, it’s an illegal contribution from a national bank,” she says.

Hans von Spakovsky, a former commissioner on the Federal Election Commission, agrees. Unless the DNC or BofA conducted an independent appraisal, the loan could be considered an illegal campaign contribution. “The FEC would require an independent appraisal of the fair market value of the list that supports the amount of the loan. Otherwise as a commissioner I would consider this an illegal contribution,” he told Pajamas Media.

In 2005, ATA attorneys for direct mail pioneer Richard Viguerie told the Federal Election Commission that ATA could not get credit using its mailing lists as collateral. Concerning its own client’s many mailing lists, ATA told the FEC that as a standard business practice, “the collateral is the mailing lists. Banks have informed ATA that this is not the type of collateral that banks use to extend credit.”

Without independent documentation, Mitchell told Pajamas Media, “you would never be able to say that their mailing list was worth $15 million. A bank would have to discount the value. So a bank would have to say it was worth at least twice that to get to $15 million.” That, she emphasizes, does require an arms-length appraisal and documentation.

Pajamas Media contacted both the Democratic National Committee and Bank of America for comment and details surrounding the transaction. As of this posting, the DNC has not replied to our inquiries. A communications person from BofA did return our phone call but could not respond to our query. [Update: They did after the piece ran; see addendum below.] She promised she would get someone to respond.

Boehm and Mitchell point out that many campaigns frequently take out short-term, temporary loans as bridge loans until new contributions come in. Most promise to pay it off before the election. The BofA terms are different.

The bank states that the first payment of principal will not be required until February 28, 2011, well after the November elections. Final payment for the debt will not be required until December 2011. What if the party found itself in deep debt after losing one or both houses of Congress?

As of October 13, the DNC reported $13.5 million of cash on hand with debts of $7.7 million. Their total worth was $5.8 million with three more weeks of campaigning ahead. (The Democratic Congressional Campaign Committee took out an additional $17 million credit line on October 21.)

There is also the issue of whether on the eve of the loan, the Democrats altered their own privacy policy about sharing private donor data. On September 14, two days before executing the loan, the DNC changed its privacy policy web page. The site initially states that their privacy policy is not to share private data: “It is our policy not to share the personal information we collect from you.”

However, the site adds in its last line that indeed it might share private information if it is the result of an “asset sale or in any other situation where personal information may be disclosed or transferred as one of the assets of the DNC.”

Is it simply a coincidence that the last item of this section acknowledges the DNC might share private information as a result of an asset sale to a third party? Or was it added to accommodate the new collateralized loan?

Other Democratic Party web sites strictly forbid the sharing of their mailing lists unless authorized by the individual. For example, one local Democratic website directly state to its supporters: “We will not give, sell or rent your email address to any other organization unless you specifically authorize us.”

The Democrats’ long-time sweetheart relationship with the banking world and with the Bank of America in particular creates the appearance of an insider deal.

BofA was very generous to Barack Obama when he ran for President. Campaign finance records show that in the 2008 election cycle, Senator Barack Obama was the top recipient of Bank of America campaign donations, reaping $421,000.

BofA’s new CEO, who took over from embattled Kenneth Lewis, is considered one of the Obama administration’s top Wall Street allies on a whole host of issues, from the creation of a consumer regulatory agency to the defense of the administration’s home mortgage fiascoes.

Here’s what Bloomberg News reported about the Moynihan-White House axis last May when he was the number two at BofA:

“He has been willing to speak out bravely in his industry on the need for reform measures,” says Valerie Jarrett, Obama’s liaison to corporate America who has met with Moynihan at the White House several times. “And he has been willing to come to Washington and roll up his sleeves and work on the issue.”

The history between BofA and Democrats goes back years. One highly publicized political scandal linked the bank and Democrats to the subprime mortgage giant Countrywide Financial, which BofA acquired more than two years ago. Countrywide CEO Angelo Mozilo gave preferential below market mortgages to leading Democrats like Connecticut Senator Chris Dodd, the chairman of the Senate Banking Committee. After the disclosure of the mortgage favors, both Dodd and Senator Kent Conrad (D-SD) decided not to run for re-election.

Dodd and other Washington Democrats belonged to a group of VIP loan recipients known in company documents and emails as “FOAs” — Friends of Angelo, a reference to Angelo Mozilo.

“This (type of loan) isn’t something that’s generally offered to the general public, but it looks like it is something of a sweetheart deal,” observes Boehm about the new BofA credit line to the DNC. “Usually when you see this it is banks with a relationship with candidates and we see that all over the place. We saw that with Countrywide,” he told Pajamas Media.

Allowing third parties access to donor mailing lists as part of financial transactions can be tricky business. For years Democratic activists hounded Republican Sen. John Ashcroft about the third party use of his mailing list. The Federal Election Commission fined his campaign $37,000.

The issue may not play well with voters either. Getting an easy line of credit may not sit well with cash-starved small businesses that have sought loans during the bad economy — even when they tried to collateralize it with real, not abstract assets.

The question is, will the DNC come clean and open their books on the transaction?

Update:

Jefferson George, a Bank of America spokesman, responds:

First, the answer to the question raised in the headline – “Did the DNC Get an Illegal Campaign Loan from Bank of America?” – is no. We follow all Federal Election Commission guidelines in our financial transactions with political parties and apply the same underwriting standards to these organizations as we do to any other institutional borrower. We also work closely with outside campaign finance legal experts to structure and document these transactions. These agreements are required to be arms-length transactions, and we are very careful with how we underwrite these loans.

As I mentioned, we have always had relationships with committees that represent political parties on both sides of the aisle. Our banking relationship with the Democratic Party dates back more than 30 years, well before the current administration. We also have provided loans for Republican candidates and committees. For instance, we provided financing for Mitt Romney’s 2008 presidential campaign.

Regarding the loans to the DNC and DCCC, due to client confidentiality obligations, we can’t discuss specific loans publicly beyond what is disclosed by the FEC, and we would refer you to those individual organizations. We can say, however, that collateral for these types of loans may include many things, and donor lists usually are insignificant compared such security measures as blanket liens against all assets, including accounts receivable. This also assumes a client doesn’t have adequate cash flow from the collection of contributions. Other factors in considering a loan include a client’s history with repaying loans on time or ahead of schedule.

Update (5:10 PM PDT):

More from Jefferson:

Thanks for this. Saw the updated story. One clarification, and it was my error: We didn’t provide financing for Romney. Rather, we had — and have — a banking relationship, handling deposits and providing other cash management services. And that relationship is still active.

Update (8:00 PM PDT):

Richard Pollack adds:

The nub of the story is that Bank of America refuses to confirm that an independent appraisal was done for the issuance of two huge loans to the Democrats totaling $32 million. While the bank might wish to invoke confidentiality, in the post-partisan era promised by President Obama, transparency around this particular loan is vital. This is especially true if there are allegations of violations of law.

The scope of the BofA small business loan to the Democrats is breathtaking. According to CNN/Money, in 2009, the bank issued 308 loans to small businesses totaling $17.6 million and in 2010 it issued 185 loans totaling $22.8 million. So the size of the Democrats’ two loans dwarfs all loans to small businesses in each calendar year. I wonder how credit-starved small business owners would feel about these Democrat loans tonight.

In that CNN/Money article, Mr. George was interviewed, saying, “Among those seeking loans, the creditworthiness of many businesses has changed. Cash flow — the most important factor — often is down. The value of collateral, such as real estate or equipment, has decreased.”

Mr. George had it right. Collateral is everything. The public has a right to know what is the collateral behind the $32 million in loans. Otherwise, it can be regarded as a gift, and patently illegal under federal campaign finance laws.

(Update: 7:54 AM PDT, 10/28):

More from Jefferson:

Your last update at 8:00 pm ET is incorrect. The numbers you cite from the CNN/Money story are for SBA loans. That was clearly stated in the story, and SBA lending is a very small percentage of Bank of America’s total lending to small businesses. In 2009, Bank of America loaned $16.5 billion to small businesses. Through the third quarter of 2010, Bank of America loaned $13.9 billion to small businesses.

Beyond direct lending, Bank of America works with Community Development Financial Institutions (CDFIs) to provide financing and technical assistance to businesses that don’t qualify for traditional financing. As the leading financial institution supporting CDFIs, the bank provides $1 billion of capital – including more than $200 million to CDFIs that finance small businesses in lower-income communities. Bank of America also recently launched a grant program for CDFIs and other nonprofit lenders, aimed at unlocking $100 million in low-cost, long-term capital for small and rural businesses. To date, the bank has awarded grants that allowed CDFIs to access nearly $27.5 million in lending capital.

In addition, Bank of America has made a commitment to increase spending with small, medium-sized and diverse businesses. The bank’s pledge to purchase $10 billion in products and services from those suppliers over the next five years will provide much-needed income for those businesses. Finally, Bank of America recently announced it will hire more than 1,000 Small Business Bankers by early 2012. Based in communities across the U.S., these bankers will consult with small business owners, spend time at their offices and assess their companies’ deposit, credit and cash management needs.

(Update:7:56 AM PDT, 10/28): Richard Pollock responds:

Thank you for your additional comments on behalf of Bank of America. We will post them in full.

As for the substance of your comments:

Actually, I understated the case in your favor by citing the CNN/Money figures. These loans are not to your smallest business customers, which are really hurting in the credit crunch. It’s your biggest SBA (7) loan portfolio, which is the government backed loan program for small businesses through the Small Business Administration.

Your $32 million dwarfs those loans, many of which have been in trouble because of deterioration in collateralized assets. Your former CEO, Ken Lewis, has admitted this repeatedly. That’s why more conservative rules need to be applied in this economic downturn, not more relaxed standards. The Democratic National Committee and the DCCC will continue. No doubt. But its indebtedness after its most expensive and probably losing mid-term election cycle may put it in a precarious state until the presidential campaign. If may twist on an old financial cautionary warning: past performance is not a guarantee of future results. In 2010, the DNC and the DCCC may face substantial indebtedness and will have to repay the loan through 2012 as well as re-build their donor base.

I strongly recommend that your urge your clients, the DNC and DCCC, to be transparent and back up the collateral for their $32 million lines of credit. Failure to do so will only give the public the impression that there was a sweetheart deal here, and perhaps even the appearance of unlawful activity as well.


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