Bank Of America Calls Foreclosure Whistleblowers Liars
Bank of America is fighting back in court against former employees who claim the bank encouraged them to push homeowners into foreclosure instead of the government’s mortgage-relief program.
In a court filing on Friday seeking to keep homeowners from teaming up to file a class-action lawsuit, Bank of America’s lawyers said that the whistleblowers had “wildly misrepresented their duties at the bank” and declared that the claims they made were “impossible.”
Shocking news: JPMorgan Chase is not exactly jazzed about some recent plans to regulate banks, including Elizabeth Warren and John McCain’s bill to reinstate the Glass-Steagall law splitting investment and commercial banks.
Even more shocking: JPMorgan seems to think it will probably be able to water down or avoid these plans.
In a Friday conference call to discuss the bank’s second-quarter profits, an analyst asked whether the Warren-McCain bill to reinstate the Depression-era Glass-Steagall law would hurt business at the biggest U.S. bank by assets. JPMorgan’s chief financial officer, Marianne Lake, dismissed the whole idea.
“Glass-Steagall didn’t have anything to do with the crisis,” Lake said, “and our business model allowed us to be a port in the storm. Our customers like doing business with us in the model we have now, so …” She trailed off, took a long pause, and then added: “We don’t spend time thinking about that.”
Bankers Resigned to Spitzer’s Return
Eliot Spitzer only declared his intention to return to New York politics this week, but bankers already appear to be resigning themselves to the reappearance of the industry’s onetime nemesis.
Spitzer, the former governor of New York, made a name for himself — and a wide swath of industry enemies — during his tenure as the state’s attorney general. His efforts to prosecute large financial companies and their executives earned him the nickname “The Sheriff of Wall Street,” so bankers wereunabashedly gleeful five years ago when Spitzer resigned amid a prostitution scandal.
But now that Spitzer is attempting a comeback by running for New York City comptroller, one can already sense that bankers are softening their public response to him. On Friday, Jamie Dimon, the chairman and chief executive of JPMorgan Chase (JPM), addressed Spitzer’s comeback with mild, diplomatic praise.
“I think the American people have the right to vote for who they want … and I’ve always had a very good relationship with Eliot Spitzer,” Dimon told reporters during a conference call to discuss JPMorgan’s quarterly earnings.
Dimon’s comments came even after Spitzer said he is gunning for the dual chairman/chief executive roles that became such a shareholder point of contention at JPMorgan this spring. Current comptroller John Liu, as manager of the city’s pension funds, was a major shareholder advocate for the much-watched proposal to strip Dimon of one title. Dimon survived the much-watched vote, but not before months of public discussion and criticism of his leadership and risk management at the nation’s largest bank.
Now Spitzer has said he will resurrect the issue. This week, he mentioned Dimon when he told theBrian Lehrer Show that advocating for the separation of companies’ chairman and chief executive roles would be one of his first priorities if he becomes comptroller.
JPM Executives Silent on Collections Problems
JPMorgan Chase (JPM) executives are staying silent about thewidespread problems in their credit card debt collections operations — and about what they are doing to fix them.
The nation’s largest bank is awaiting a regulatory enforcement actionover how it pursues borrowers who have appeared to fall behind on their credit card debt. It is alsofacing a California lawsuit charging that it has consistently taken procedural shortcuts and used inadequate paperwork and illegal “robo-signing” to support its collections activities.
Law firm files suit for BofA homeowners seeking modifications
The law firm of Hagens Berman Sobol Shapiro filed a class action lawsuit on behalf of homeowners alleging Bank of America ($13.780.27%) created an enterprise designed to defraud borrowers seeking loan modifications through the Home Affordable Modification Program.
The complaint claims the banking giant created a scheme that allowed it to deny help it promised to give thousands of customers in exchange for $45 billion in bailout funds.
“We believe that Bank of America gamed the system, perpetrating a fraud on both its customers and American taxpayers,” said Steve Berman, managing partner of Hagens Berman and one of the attorneys who filed the lawsuit.