Daily Archives: November 4, 2012

African American churches protest foreclosures by black-run bank

A coalition of African American ministers is protesting foreclosures on their churches — byBroadway Federal Bank, a savings bank established in the 1940s to serve Los Angeles’ then-segregated black community.

About one-quarter of the money Broadway Federal has lent out has been for mortgages on church properties. In the tough economy, it’s become a problematic business for the bank, which regulators have categorized as troubled since 2010.

The bank’s annual report for 2011 with the Securities and Exchange Commission said regulators have barred it from making additional church loans. Broadway Federal, which continues to be run by African Americans, said its problems “raise substantial doubt about the company’s ability to continue as a going concern.”

As of June 30, according to a financial report from parent Broadway Financial Corp., the bank had over 12% of its loans and other assets in delinquency or foreclosure, and seven repossessed churches on its books. Broadway Federal turned a small profit during the first half of this year after losing $14 million in 2011.

Read on.

Wells Fargo, U.S. Bank scrutinized by regulators for their payday-like loans

Federal regulators are scrutinizing payday-like loans offered by the likes of U.S. Bancorp and Wells Fargo & Co.

Businessweek reports that the Federal Deposit Insurance Corp., Consumer Financial Protection Bureau and at least one state attorney general are looking into the high-interest-rate loans.

Wells Fargo charges $7.50 for every $100 borrowed while U.S. Bancorp charges $2 per $20 borrowed under the U.S. Bank Checking Account Advance product. Both banks cap the loans at $500.

U.S. Bancorp (NYSE: USB) and Wells Fargo (NYSE: WFC) declined to discuss regulatory matters, Businessweek said.

Read on.

Treasury committee could grill US companies over ‘tax evasion’

The Commons committee, headed by Andrew Tyrie MP, is considering whether to lend its weight to the escalating furore over the UK tax affairs of large foreign-based businesses with UK arms – and could call companies to account by early next year.

Such an investigation would look at how tax policy should be recalibrated by the Government to ensure profits are not being siphoned off aggressively to lower tax-paying jurisdictions and away from the exchequer.

It would mark an escalation of the campaign against corporate ‘tax evasion’ which is set to see executives from Starbucks, Amazon and Google grilled by MPs within days. The trio already face a probe from the Public Accounts Committee, and have been asked to given evidence next Monday.

The PAC is looking at the effectiveness of HM Revenue and Customs and whether it is doing enough to ensure the taxman gets everything he’s owed. Today, the Committee is to questions Lin Homer, chief executive of HMRC, and will focus on the methods that foreign corporations employ to pay so little in tax, and whether the taxman is able to cope.

Read on.

HSBC Hit By £500m Money Laundering Charge

New provision for money laundering breaches escalates a penalty facing British bank HSBC to nearly £1bn, Sky News learns.

SBC will tomorrow prolong the latest wave of financial penalties for Britain’s banks by setting aside hundreds of millions of pounds more to cover settlements for breaching anti money-laundering rules.

I have learned that HSBC will raise the likely bill for fines from US authorities to as much as $1.5bn (£935m) in its third-quarter results, a move that will underline the growing seriousness of the probes into the conduct of one of Britain’s biggest lenders.

The revised estimate will mean HSBC allocating $800m (£500m) to potential penalties in its accounts for the three months to the end of September following a $700m (£437m) hit disclosed in its half-year results in July, analysts say.

The expected fines relate to inadvertent breaches by HSBC of anti-money laundering procedures in its Mexican operations which are now under investigation by a string of powerful US watchdogs.

If the eventual settlement does reach as high as $1.5bn, it would be one of the largest punishments ever meted out to a British bank.

Read on.

GOLDMAN SACHS ASKS SUPREME COURT TO DISMISS MORTGAGE CLASS-ACTION

While on September 6, the 2ndU.S. Circuit Court of Appeals in New York allowed a mortgage class-actionlawsuit to go ahead with the lawsuit accusing Goldman of misleading investors about the securities risk, Goldman wants to take no risks and is urging the Supreme Court to throw out the lawsuit. It’s arguments are brilliant – allowing the lawsuit could cost Wall Street tens of billions of dollars, and therefore the U.S. Supreme Court must trash the interests of a class, from which money could have been taken by deceit byWall Street, in order to protect the interests of Wall Street.

And of course, lawyers in pay of Goldman have also found technical questions of law: They argue that the 2nd Circuit allowing the NECA-IBEW Health & Welfare fund to move ahead with the class action on behalf of investors, though the NECA-IBEW did not own any of the controversial mortgages, conflicts with a precedent from the federal appeals court in Boston. In that case, which the federal court in Boston had held that a plaintiff could not pursue claims on behalf of a class that it could not bring by itself.

Rest here…

Wealthy Greeks Still Don’t Pay Taxes

Greece has the same problem as US

Average Greeks are reeling under the strict austerity measures passed in order to balance the country’s budget. Top earners, on the other hand, continue to evade the tax man. Most of the self-employed in Greece significantly underreport their earnings, whereas shipping magnates enjoy generous exemptions.

The principle of tax justice may be enshrined into the Greek constitution, but it has become increasingly obvious that not all Greek taxpayers are created equal. Currently, the government in Athens is preparing yet another round of harsh austerity measures, severely testing the cohesion of both the coalition and society. Already, such measures in combination with tax hikes have slashed average household income in Greece by half since the beginning of the crisis. Measures now planned will see pensions sink by 25 percent.

At the same time, though, a small elite of wealthy Greek ship owners is fighting to defend its tax-free status — also, ironically enough, enshrined in the constitution. Meanwhile, other moneyed Greeks, including doctors, lawyers and engineers, continue to systematically avoid taxes. According to a recent study, seven out of 10 self employed Greeks significantly underreport their earnings. Indeed, though the crisis has been raging for five years now, many wealthy Greeks are under no more pressure to pay taxes than they were before.

Read on.