For the first time, megabank JPMorgan Chase publicly announced its position on financing companies that engage in mountaintop removal (MTR) coal mining, a particularly destructive—to nearby water sources, wildlife, and communities—practice that involves the demolition of mountain summits. As I've previously reported, JPMorgan has financed close to 20 deals worth $8.5 trillion for companies that engage in MTR mining. For that, various environmental groups have blasted the bank for not cutting off financing for these companies, and for refusing to make public its policy on MTR.
When I was reporting my story, JPMorgan declined multiple requests to interview James Fuschetti, managing director of the bank's Office of Environmental Affairs. Then, when the article came out, Fuschetti emailed me to say his office had no record of my requests and that my story "would have substantially benefitted" had I spoken to someone at JPMorgan. When I emailed Fuschetti back to say I'd asked several times (a fact his office did indeed have a record of), I said I'd be happy to speak with someone at the bank and update my story. Again, the request was turned down.
Now, with its 2009 Corporate Responsibility Report (pdf), JPMorgan has finally opened up about its MTR policy. The bank says in November 2008 its environmental affairs office began an "in-depth and comprehensive examination" of MTR and its impact on Appalachia. And starting in early 2009, the report says JPMorgan's environmental and social risk management team has been reviewing all deals involving companies engaged in MTR. As new state and federal regulations on MTR are developed, the bank says it will "continue to follow the actions" of those regulators to stay in line with the latest MTR rules.
Environmental groups praised JPMorgan for its first public MTR disclosure. Rainforest Action Network, which has consistently pressured the bank to completely phase out all MTR-related financing, called the statement "a welcome step forward." RAN tempered that praise, though, by saying JPMorgan needed to get tougher on MTR companies by cutting them off altogether. "If JPMorgan wants to lead instead of follow on environmental responsibility," the group said in a statement, "the way forward is a complete phase-out of mountaintop removal coal financing."
Last week, Sen. Sam Brownback (R-Kan.) went head to head on financial reform with the biggest US bureaucracy of them all, the US military—and, it turns out, used some dubious facts in doing so. On May 14, Brownback wrote to an undersecretary of defense, Clifford Stanley, with questions about exempting auto dealers from oversight by a proposed Consumer Financial Protection Bureau, a centerpiece of the financial regulatory reform being debated in Congress. The letter pitted Brownback against one of the biggest opponents of this auto dealer loophole—the US military. As Mother Jones' Stephanie Mencimer has reported, soldiers are frequently targeted by predatory and unscrupulous car salesmen, and are duped into buying overpriced cars on unfair terms. The military wants auto dealers to fall under the bureau's oversight, and has lobbied just as hard to kill a dealer loophole as dealer organizations, such as the National Auto Dealers Association, have lobbied to preserve it.
Here's where it gets messy with Brownback. In his letter to Stanley, Brownback mentioned a recent news article as evidence of why new dealer regulation was a bad idea:
CNN Money on May 13 reported that "Raj Date, executive director of the Cambridge Winter Center for Financial Institutions Policy, agreed that the additional [CFPA] regulation might cause some dealers to stop arranging loans."
Today, a presumably pissed-off Date sent a letter to the DOD's Stanley, pointing out that Brownback had seriously twisted his position to fit an existing agenda. Here's how Date's comments appeared in full in the article:
Raj Date, executive director of the Cambridge Winter Center for Financial Institutions Policy, agreed that the additional regulation might cause some dealers to stop arranging loans. "There will be some dealers who say 'If I have to play by an honest set [of] rules, then I can't be in this business anymore,'" Date said. "I'm not going to shed any tears for these dealers."
Date goes on to write in the letter, "It is my strong opinion that only those auto dealers that cannot play by honest rules would exit the business." Which should be the objective of any tough consumer protections, right? If you can't play by the rules, then get out. A request for comment by Mother Jones from Sen. Brownback's office wasn't immediately returned.
The Treasury Department released yesterday the latest monthly data for its flagship homeowner relief program—and it's not pretty. So far, in the 14-month-old Home Affordable Modification Program, just under 300,000 homeowners have received permanent modifications to their mortgages—that means lower payments for a three- to five-year period for the homeowner to try to keep them in their home. Those modifications, however, are dwarfed by the pool of delinquent borrowers deemed by Treasury as eligible for HAMP, numbering 1,702,134. (For a bit of context, there were 2.8 million foreclosures in 2009.)
What's more telling is this graph, via Calculated Risk, that shows the pace of new trial modifications—the testing period for homeowners to prove they can stay current on their theoretically lowered payments—is noticeably slowing down. In September 2009, HAMP recorded nearly 135,000 new trial modifications; in April 2010, there were 37,021 modifications. The graph below shows that this decline has been underway since the beginning of 2010.
If we look at the HAMP program stats (see page 5), the median front end DTI (debt to income) before modification was 44.9% - up slightly from 44.8% last month. And the back end DTI was an astounding 80.2% (up from 77.5% last month).
Think about that for a second: over 80% of the borrowers income went to servicing debt. And it is over 64% after the modification. Do they have a life?
Just imagine the characteristics of the borrowers who can't be converted!
In summary: 1) the program is dying, 2) the borrowers DTI characteristics are poor - and getting worse, and 3) there are a large number of borrowers in modification limbo.
Can Senate Republicans make up their mind on financial reform? During the past month, Minority Leader Mitch McConnell (R-Ky.) and company have flipped and flopped and flipped again when it comes to writing and passing a bill overhauling how Wall Street, mortgage companies, auto dealers, payday lenders, and many more do business. With the latest stance taken by top Senate GOPers, the party has shown that it's in near-disarray when it comes to financial regulatory reform.
In late April, on threesuccessiveoccasions, Senate Republicans blocked Democrats' efforts to open a full debate on financial reform on the Senate floor. Eventually, that filibuster broke, which in theory should have allowed the discussion to kick off. But Republicans refused to offer any amendments or participate in the debate until Sens. Chris Dodd (D-Conn.) and Richard Shelby (R-Ala.), the top senators on financial reform, had worked out yet another backroom deal on the bill.
Once the debate began, top Democrats like Majority Leader Harry Reid (D-Nev.) set a Memorial Day deadline for merging the Senate's bill with the House's and delivering the final product to President Obama. At that point, GOPers sought to prolong the Senate debate—Rep. Spencer Bachus (R-Ala.) said any final vote by the Senate should be delayed by 30 days so the public could read the text. McConnell also predicted last week that the amendments process would last at least several more weeks, casting further doubt on Reid's deadline.
It didn't take long for the handful of irritated Bank of America employees to abandon their desks and make for the doors. Their office, a small Bank of America branch on Massachusetts Avenue, had been more or less taken over by a boisterous rally of 75 or so protesters from the Service Employees International Union (SEIU), the organizer behind two days' worth of Wall Street-themed protests in or near Washington. Yesterday, many of the same demonstrators, brought to DC from all over the country by SEIU and National People's Action (NPA), a community organizing network, protested outside the houses of two financial lobbyists—one from Bank of America, another for JPMorgan Chase. The demonstrators railed against bailouts and demanded that the two lobbyists tell their respective CEOs to meet with SEIU and NPA's leaders.
Today, the demonstrators bounced between various office buildings and banks in downtown DC, most of the locations linked to Wall Street, lobbying, or big banks. The day began in the building that houses the Corrections Corporation of America, a private prison company that's received hundreds of millions of dollars of government contracts. After that came the Bank of America takeover, then a second, ad hoc protest inside a nearby Citibank office, to the dismay of the tellers and bankers inside.
Standing outside the Bank of America office in the morning rain was DC resident James Crowder. A Bank of America customer, Crowder cheered on the purple-clad protesters, baring a wide grin short a few teeth. "I totally agree with this here," Crowder said. "They need to do this to all the banks."
A protester holds up a flier criticizing Tony Podesta, the head of a top Washington lobbying firm. Flickr/movementvisionSoon after, with a police escort of four squad cars and two bikes, SEIU demonstrators convened with several busloads of NPA members outside the Podesta Group, a top Washington lobbying shop that represents, among others, Wells Fargo, Bank of America, and Sallie Mae, the country's largest private student lender. There, as a light drizzle began to beat down harder, members of both organizations led chants and numerous speakers recounted their battles with big banks or mortgage companies.
With the rain now pouring down, the two-day stand by SEIU and NPA culminated around midday when upwards of a thousand protesters rallied in McPherson Square, then occupied the nearby intersection of 14th St and K Street. In the intersection, under a large cardboard cutout of a Lloyd Blankfein-esque Wall Street executive controlling a politician on a string like a marionette, SEIU president Mary Kay Henry and others spoke to the soaked crowd. "The American people have a deep desire to fix what’s broken with our economic and political system,” Henry said. "That’s why a movement is building across this country to challenge the toxic influence Wall Street and corporations have on our democracy."
Finally, the throngs of people ended up in front of a regal-looking Bank of America office a stone's throw from the White House and the Treasury Department. Even as members of the demonstrators peeled off to duck inside a coffee shop or head toward their buses, the chants—"We're gonna take our democracy back / We're gonna take-take our democracy back"—continued into the soggy afternoon.