Chase CEO Jamie Dimon is increasingly vocal in public about his newfound ethical concerns. He made a very public statement distancing himself from President Trump over Trump’s failure to condemn white supremacy in Charlottesville, Virginia. He has also described himself as “pro-immigrant”: an opinion that is hard to square away against his roles as a financier, underwriter and bond-holder of private prison corporations like GEO Group and Core Civic (formerly Corrections Corporation of America). Both corporations oversee Immigrant Detention Centers throughout the U.S., many of which house undocumented migrants.
JPMorgan Chase’s investments in private prisons certainly make economic sense: the private prison industry is worth about $5 billion, and the election of Donald Trump has caused the profits of the sector to balloon further. Almost immediately after Trump’s inauguration, the Department of Justice rescinded the Obama administration’s order to phase out federal private prisons from the criminal justice system.
It’s a little-known chapter from the worst financial crisis since the Great Depression:
In 2009, shortly after the housing market crashed and the markets melted down, the owners of a small community bank in New York City’s Chinatown discovered fraud within their loan department.
The bank’s owners, the Chinese-American Sung family, fired a loan officer — and reported the fraud to their regulators at the federal Office of Thrift Supervision.
But two-and-a-half years later, the bank was accused of mortgage fraud by the Manhattan District Attorney’s Office — making Abacus Federal Savings the only U.S. bank to be prosecuted in relation to the financial collapse and the first bank indicted in New York since 1991.
Why did Abacus face charges
, while the biggest banks on Wall Street all avoided prosecution for fraud related to the sale of bad mortgages?
That’s the question at the heart of Abacus: Small Enough to Jail, the newest film from acclaimed documentary director Steve James (Hoop Dreams, The Interrupters). Fresh off of a robust international film festival run and national theatrical release, the documentary has its national broadcast premiere tonight on FRONTLINE.
In vivid detail, Abacus chronicles the Sung family’s quest to clear their names, the district attorney’s case against the bank — and how 19 of the bank’s ex-employees, largely immigrants, were treated by the justice system.
The Iowa Attorney General’s Office is investigating Wells Fargo after its employees opened up millions of unauthorized accounts.
“I think it’s pretty clear that opening accounts in people’s names without their authorization or knowledge would be an unfair, deceptive act or practice,” said Assistant Attorney General Patrick Madigan, who works with the office’s Consumer Protection Division.
Janice Rivers found her dream home on Souder Street in northeast Philly. The 52-year-old teacher’s assistant for the Philadelphia School District bought the two-floor condominium in the winter of 2001 for $66,000. It had everything she was looking for: two spacious bathrooms, a deck for barbecuing, and a finished basement large enough to act as a workspace. This house is where she had planned to spend her golden years. But despite the memories she’s made here over the past 16 years and all the hopes she had for it, Rivers is now on the verge of losing her beloved house.
Rivers is one of the numerous black and Latino homeowners in Philadelphia who believe Wells Fargo has ripped them off. She’s been on the brink of homeownership disaster for the past two years, and she says it is due to the runaround Wells Fargo has given her on a loan modification that would have cut her monthly payments almost in half. Now, facing monthly mortgage payments of about $1,000, Rivers doesn’t see a realistic scenario in which she can consistently pay off the loans.
To make ends meet, she’s tried to turn every room in the house into a revenue generator. In the basement, she runs a daycare business. Upstairs, she makes gift baskets and party decorations. But despite her efforts, the financial burden has become unbearable.
“I’ve had a lot of sleepless nights wondering what would be the outcome of my home,” she says. “I didn’t want to spend money. I didn’t want to do a vacation or work on my home. I didn’t know how much I would need to save my home, and if I would need to save it… Every penny mattered.”
In what can only be regarded as a shocking development, the United States is suing the former head of subprime mortgage trading at Deutsche Bank over “systematically and intentionally” lying about the quality of subprime mortgages that backed nearly $1.5 billion in mortgage-backed securities in the run-up to the crisis.
The lawsuit marks one of only a handful of times the government has gone after an individual for crisis-era mortgage fraud at the systemic level; an untold amount of MBS traders from this era still walk free.
A mortgage company can’t bring a second foreclosure action against a borrower after losing a similar foreclosure in the court system, Maine’s supreme court ruled.
The court on Thursday unanimously upheld a ruling against mortgage giant Fannie Mae, which tried to launch a second foreclosure on a property in Lincoln after a judge threw out the original case.
“It reinforces case law that says you really get only one bite of the apple,” said James Cloutier, attorney for Patricia and Paul Deschaine, who own the home in Lincoln.
The Deschaines took out a loan on principal of $127,920 to buy the property in October 2004, and Fannie Mae brought a foreclosure proceeding in 2011 after finding the Deschaines in default.
Four years ago, JPMorgan Chase reached a then-record settlement with the Department of Justice after, among other things, the bank received a copy of a U.S. attorney’s draft complaint documenting its alleged role in underwriting fraudulent securities in the years leading up to the 2008 financial crisis. Following the bank’s $13 billion financial agreement, the draft complaint was never filed. Then the bank paid another settlement to prevent a separate legal case from potentially unearthing it. The contents of the draft complaint have long been a financial-crisis mystery, a Great White Whale of a document. At least until now.
A proposed class-action lawsuit was filed against Equifax Inc. late Thursday evening, shortly after the company reported that an unprecedented hack had compromised the private information of about 143 million people.
In the complaint filed in Portland, Ore., federal court, users alleged Equifax was negligent in failing to protect consumer data, choosing to save money instead of spending on technical safeguards that could have stopped the attack. Data revealed included Social Security numbers, addresses, driver’s license data, and birth dates. Some credit card information was also put at risk.
On August 31, just hours after Wells Fargo revealed that employees had created at least another 1.4 million unauthorized consumer accounts, a coalition of 33 consumer groups fired off a letter to two congressional banking committees charging the bank may have lied to Congress last year about its fraudulent auto insurance sales.
The coalition, led by Public Citizen & Americans for Financial Reform, suggest top-ranking executives at Wells Fargo may have misled lawmakers during an active investigation last year. During congressional hearings held in September 2016, the executives “may have knowingly and deliberately withheld information” about the bank’s fraudulent auto insurance sales practice, according to the coalition.
The auto loan scandal, broken by the New York Times earlier this month, revealed an internal Wells Fargo report that showed the bank had charged more than 800,000 people for auto insurance they did not need, leading 274,000 customers to become delinquent on their car loans and nearly 25,000 to have their vehicles repossessed. Some of them had their credit damaged, including enlisted military personnel who stand to lose security clearances as a result of damaged credit scores.
The consumer coalition reports that the bank’s own timeline showed it was aware of the 800,000 customers sold unnecessary insurance in July 2016, several months before when the executives testified before the two banking committees in Congress. “Yet Stumpf’s testimony made no mention of this misconduct, even when he was asked directly whether fraudulent activity might exist in other business lines,” the coalition pointed out.