The Bank Occupy Couldn't Live Without

Bank of America seems determined to keep providing fuel to keep the Occupy movement going strong.

You probably recall the bank’s plan to soak its customers by charging them to use their debit cards, which was withdrawn after a torrent of bad press.

Clearly, all is not happy in Bank of Americaland, where the stock has dropped about 50 percent from 2010 levels. Despite being propped up by millions in taxpayer help as well as by Warren Buffet, the bank remains in so much trouble that in September, the bank announced plans to lay off 40,000 employees, mainly in its consumer division.

Who needs those consumers anyway?

It’s not just the bank’s lowly employees that are losing their jobs. A couple of top executives are leaving too, but the bank made sure to cushion the pain of their leaving with millions of dollars in severance and benefits.

The bank was also forced to cut back one of its most prized activities last year, spending a paltry $2.2 million on lobbying last year, down from nearly $5 million before the financial collapse.

You may not have heard about the bank’s latest effort to keep the protestors busy. They’ve decided to put the squeeze on another bunch of customers, this time small-businesses.

Several small-business owners told the Los Angeles Times is now forcing them to pay their balances in full, instead of on a monthly basis, as they used to. This change, the business owners say, could wipe them out.

Meanwhile, a firm that helps small businesses get loans calls Bank of America’s level of small-business lending “a disgrace for the largest bank in the country”.

Ami Kassar, CEO and founder of MultiFunding, says Bank of America ranks 6,128 out of 6,800 based on its small-business lending.

Three years after the financial collapse, Wall Street is still a dysfunctional mess, providing little help for Main Street. Meanwhile, our political leaders, for the most part, show no inclination to correct the mistakes that have gotten us here.

 

 

Mr. President, Keep Your Promise

President Obama got generally high marks earlier this month for “getting it” after he struck a populist tone in his speech at Osawatomie, the Kansas town where he evoked the progressive spirit of former president Teddy Roosevelt.

But if he really wants to do something about the economic pain Americans continue to suffer, the president could start by keeping a campaign promise he made – to lead a fight to reform bankruptcy laws to allow judges to modify mortgage loans in their courts.

Under heavy pressure from bankers, the Senate defeated such a proposal in 2009, while the president and his administration remained silent on the sidelines.

At the time, Illinois Sen. Dick Durbin said bitterly, referring to Congress, the big banks “frankly own the place.”

The administration’s refusal to address the foreclosure crisis remains one of the sorriest aspects of its consistent underestimation of the depth of the economic crisis.

Earlier this month, the non-profit investigative journalism outfit Pro Publica filled in the details on how the administration pooped out on the president’s campaign promise. It turns out that many on the president’s bank-friendly economic team were never enthusiastic about cram-down.

The idea behind judicial cram-downs is to treat mortgage debt the same as other debts which bankruptcy judges are permitted to reduce as part of a bankruptcy.

The impact would be to encourage bankers to reduce principal on mortgages before they ever got to bankruptcy court. Judicial cram-down would be far more effective than the Obama administration’s previous failed programs intended to address the foreclosure crisis, which offered banks insufficient incentives to voluntarily modify loans with inadequate government oversight.

Part of the reason the president can’t hammer the Republicans for their lack of any plan to address foreclosures is that he hasn’t come up with a decent plan of his own – and that he didn’t fight hard enough for a solution like cram-down, which lost by six votes in the Senate, including 12 members of the president’s own party.

In addition, 11 Republicans who represent states among the hardest hit by the foreclosure crisis also voted against cram-down.

Couldn’t a tougher, savvier, more committed fight by the president come up with the seven or so votes needed to win this fight?

As the  president takes on the big banks. he may take encouragement from these words from the predecessor he evoked so successfully at Osawatomie:

“The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”