Protesters Launch Showdown With Monster Banks, Demand Wells Fargo End Predatory LendingZephyr Teachout in AlterNet, April 27, 2010
By Daniela Perdomo, AlterNet
Posted on April 27, 2010, Printed on April 30, 2010
"We are many and they are few -- and today they have to deal with us!" yelled an organizer at a San Francisco march and rally on Tuesday afternoon aimed at calling out Wells Fargo for its predatory lending practices. A crowd of a few hundred pissed-off consumers responded boisterously by repeating a catchy chant: "Hey, big banks, where's our dough? Working families have a right to know!"
The San Francisco showdown at Wells Fargo was the first of a series of events to be held throughout the country this week, bearing down at the big banks' annual shareholder meetings to demand action on everything from foreclosure prevention, job creation and an end to predatory consumer practices. Added together, these protests will bring together the largest number of people yet in the fight against the too-big-to-fail banks that foisted the recession on consumers while reaping bailout money and facing little to no consequences for their misdeeds.
The big banks are on the ropes these days. Despite the near-collusion of the Treasury Department and Goldman Sachs, last week the SEC indicted the previously untouchable investment bank with fraud. The hearings began on Tuesday. There's no telling yet which way things will go but it's obvious the financial industry feels fire beneath its feet.
As it should. Financial reform is the next big thing on the congressional agenda, and while the industry's political enablers managed to filibuster the first version of the financial regulation bill on Monday, suits both in Congress and on Wall Street are finally starting to realize just how angry the people are. Two-thirds of Americans support more strict financial reform, which means, among other things, much more stringent regulation of the so-called "complex financial instruments" the biggest banks employed as they crashed our economy in 2008.
Wall Street is so worried about the prospect of real reform that for over a year now, it's handily spent $1.4 million daily in lobbying and campaign contributions, attempting to buy out policy-makers and prevent substantive financial reform from passing.
The financiers who've captured the American economy are about to get more worried, however, as a broad coalition of community and labor groups have launched a series of rallies and marches calling for bank accountability.
"The big banks and Wall Street got what they paid for [Monday]" -- with the filibuster -- "but this week of actions and the ones that follow will show Congress that the American people are paying attention, have had enough, and will not allow their democracy to be hijacked," says Liz Ryan Murray, senior policy analyst at National People's Action, which together with SEIU, AFL-CIO, PICO National Network, and others is coordinating the demonstrations, which will culminate with the "Showdown on Wall Street!" protest in New York on Thursday.
Zephyr Teachout, activist and professor at Fordham Law School, believes the mobilizations can have a huge impact on how strong the financial reform bill will be. "These are the greenshoots of public anger, and they probably don't even represent the much steeper depth of public anger," she told AlterNet. "The financial industry had been counting on the public -- and Congress -- being intimidated by the complex nature of the reforms we need, but if the public gets involved there's the opportunity for extraordinary New Deal-level reordering of our system that makes it much more fair, reliable and stable."
In other words, people power can make the difference between a financial reform bill that is symbolic and ineffective, and one that really changes the system for the better.
As the crowd of union members, community activists and angry bank consumers weaved its way from the Embarcadero up Market and California streets in downtown San Francisco, bankers in dark suits watched curiously as sidewalks that are normally financial arteries started to pulse with populist anger. The protesters followed an empty horse-led stagecoach, a real-life representation of the Wells Fargo logo. It was empty in order to symbolize the bankrupt morality of the bank, organizers said.
An AFSCME union member blew on a conch shell, startling a group of men on their lunch break outside Nomura, a Japanese investment bank. A Chase customer stopped the group in front of his bank's branch to tell his foreclosure story. He concluded with a rallying cry: "This is criminal and needs to stop."
Protesters' signs read: "Stop Corporate Greed," "Make Wall Street Pay," "Neighbors United Can Stop Foreclosures." The most resonating rallying cry called for "Justice, now!" A few onlookers joined the march as the loud, angry group made its way to Wells Fargo's global headquarters, where across the street, on the 15th floor of the Merchants Exchange Building, the bank was hosting its annual stockholders meeting.
Wells Fargo is one of the so-called Big Four banks, alongside Citigroup, JPMorganChase and Bank of America. To give a sense of its reach, by late 2008, Wells Fargo held nearly 9 percent of the nation's deposits and likely an even larger percentage of the country's bank assets.
The bank was a significant player in the subprime mortgage crisis that sent our economy and many families to the brink -- and onto the street. In 2006, Wells Fargo issued $74.2 billion worth of subprime loans, making it one of the largest subprime lenders in the country. According to the Treasury Department, the bank has only permanently modified 7.9 percent of its estimated 378,480 eligible loans in the Making Home Affordable program.
Wells also stands accused of being racist -- in 2008, it was three times more likely to deny loans to neighborhoods of color than to white neighborhoods in Oakland and San Diego. (One protester, David Ramirez, spoke of being denied a loan when he applied as a Latino. He resubmitted his application, ticking off the "White" box, and was accepted for what turned out to be a subprime mortgage.)
In addition to being a predatory mortgage lender, Wells has long been in cahoots with the payday loan industry, which takes advantage of cash-strapped working families by offering them short-term, high-cost loans. The bank provides credit to six of the seven major payday lenders, while it charges its own customers a 240 percent annual interest rate on payday loans from Wells' ATMs.
Al Marshall, a city employee from Oakland, told the assembled crowd his sad story. He, his wife, and six children lost their home of 12 years after Wells Fargo refused to modify their mortgage. They asked for the modification without ever having missed a payment. "Wells Fargo laughed at me -- well, you won't laugh today," Marshall said, pointing to his fellow protesters.
Fifteen stories up, the Wells Fargo executive board told shareholders of their plans to up compensation now that the bailout restrictions no longer applied to them. John G. Stumpf, the bank's chairman, president and CEO received a total compensation package of over $21 million in 2009, up from $9 million in 2008, according to the meeting's agenda, obtained by AlterNet. The document showed that Mark C. Oman, the man in charge of Wells Fargo's home and consumer finance division made almost $13 million in 2009, up from $4 million in 2008.
Meanwhile, Wells Fargo customers continued to speak of the misery they'd experienced at the bank's hands. There was consensus that it was impossible to get straight answers around loan modifications -- they were given false names, directed to phone numbers that were never answered, and, of course, were outright lied to. "Close your account! Close your account!" became a rousing cry, as Wells Fargo employees looked out the windows of their corporate fort.
Preschool teacher Marilyn Reynolds had been a 30-year customer of Wachovia, which merged with Wells Fargo during the financial meltdown. Reynolds had successfully paid off a mortgage on a home, and used Wachovia again in 2007 when she bought a home for her daughter. The house, then valued at $225,000, is now worth $95,000. For the past year, Reynolds has been asking for a loan modification.
"There's always a different answer for why I can't get a loan modification," Reynolds said. "I had perfect credit and they took good customers and made us bad ones. So many people in our community, especially African Americans and Hispanic people, are victims of this. We thought if we didn't buy now we'd never get the American dream. Now millions of us are ruined, foreclosed on, or on the street."
Though her situation is unfair, Reynolds is relatively lucky. She owes monthly payments than are much higher than is reasonable, given the value of the home, but she and her daughter's family can actually pay them. She said she was at the rally not only to protest her unfair payments but to fight for all those who can barely make ends meet. "Right is right and wrong is wrong -- and Wells Fargo is wrong," Reynolds said. She has removed all money from her Wells accounts, and keeps the account open only because she is tied to the mortgage.
Edelmira Chavez, a housecleaner in Oakland, said she had stopped buying clothes and other basic necessities in order to make the $2,200 monthly mortgage payments to Wells Fargo. She only makes $2,500 per month now -- she used to make more before the economy crashed -- leaving only $300 to feed and care for herself and her 12-year-old daughter, Bianca. She's been asking for a loan modification for seven months. "They keep asking for paperwork to pass time," Chavez said in Spanish. Somehow, she's not yet been late making a payment on the house that is now worth half of what it was a few years ago -- but she doesn't know how much longer she can last.
Late into the rally, as the rain started coming down, news came that the coalition's representatives had been shut down on every demand made to Wells' board. The bankers had rejected the request for a moratorium on foreclosures and said they did enough to help keep families in their homes. They denied that they engaged in predatory lending, and the CEO said he would not resign from the Business Roundtable, the pro-business lobbying group that has been spending so much money to fight financial reform.
Adding insult to injury, Stumpf said he would not meet with coalition members to hear consumers' concerns.
Perhaps the best news came from a text message sent to rally organizers from within the shareholder meeting. It let everyone know that despite the rejection of all of the coalition's demands, the shouts and anger on the street could be heard quite well, even 15 stories up. The people want to forgo Wells Fargo, and now the bank knows it.