Perhaps calling what the banks have been up to in the past decade “mafia capitalism” is starting to become a slur on organized crime. Today we learned that major banks served as money laundering operations, openly discriminated against people of color, and that JP Morgan lost far more gambling than they had admitted. To try and cover this up, the NYPD launched a sad smear campaign against OWS that totally backfired.
In London, where regulations are so laughably weak that banks can do just what they want, HSBC was busted as a money-laundering front. Within the bank, this has been known for a long time and people in compliance who wanted to do something about it have been assaulted. Speculation is rampant that fines here may reach $1 billion for
the money laundering and terrorist finance vulnerabilities created when a global bank uses its US affiliate to provide US dollars, US dollar services and access to the US financing system to high-risk affiliates, high-risk correspondent banks and high-risk clients.
This is policy-speak from Congress about Iran. It shows that when the government actually cares about the outcome of an investigation, it is willing to use its powers to the full. By inference, then, it does not care very much about what happened in loans to its own citizens.
Elsewhere today, banks continued to display contempt for those citizens. Wells Fargo was merely the latest bank to admit that the long-standing practice of “red-lining” continues. That is to say, banks used to openly designate certain areas of cities where minorities lived as “red-lined,” meaning no loans were to be approved.
Here’s the official definition of red-lining:
Red areas represent those neighborhoods in which the things that are now taking place in the Yellow neighborhoods, have already happened. They are characterized by detrimental influences in a pronounced degree, undesirable population or infiltration of it. Low percentage of home ownership, very poor maintenance and often vandalism prevail.
This, then, was official policy in the 1920s and 30s. The impressive T-RACES digital project that has mapped these red-lined districts has shown that such neighborhoods continue to be financially disadvantaged and have a higher percentage of minority residents than favored areas for lending today.
Today, the hustle extends to selling more dubious products to people of color. Wells Fargo
steered more than 4,000 minority borrowers into costlier subprime mortgages when white borrowers with similar credit risk profiles had received regular loans.
African Americans paid an extra thousand dollars in fees per hundred thousand borrowed and were 2.9 times more likely to be made to take a sub-prime loan.
Now we’ve crossed $500 million in fines to major banks for racist loans of this kind but the reparations should just be beginning. Remember this clown?
Chicago trader Rick Santelli “spontaneously” rants against mortgage support for certain “people,” who will “drink the loan.” The flimsily-concealed racism has been a subtext to the entire Tea Party movement and the hostility to debt abolition. Now we can see that many of these loans were pushed on people who did not deserve (if anyone does but that’s another question) the high terms of a sub-prime mortgage. And then became targets of white resentment when the set-up-for-failure arrangement failed.
Tomorrow JP Morgan Chase will announce huge losses, somewhere between $2 and 9 billion for the quarter due to their terrible investments. These were pre-leaked today to try and minimize the impact. Do we think that there will be people on CNN and Fox ranting against Jamie Dimon? Of course not.
Instead yesterday the NYPD launched a bizarre allegation that someone in OWS must have been involved in a high-profile murder case because DNA found at a scene where some presumed OWS people had opened a subway gate matched that found at the murder. Except, oops, it turned out to be that of the Chief Medical Examiner. Somehow this cock-up found its way into all the newspapers. Retraction on p. 100 in the 4 point font. And last night irritated cops launched a totally unprovoked attack on people in Liberty Plaza, whose main offense appears to be “refusal to go away.”
No wonder the Democratic party wants the movement to concentrate on the generic “money out of politics” meme. Now the reality of what the finance capitalists actually did in this administration as well as the last is starting to emerge. Maybe we’re ready for a discussion on how to replace this morally and financially bankrupt system? Maybe it’s time to red-line the banks.