On Tuesday, over 300 members of the Colorado Progressive Coalition (CPC) went to Wells Fargo – the state’s largest bank – to close their accounts. The mass action was in protest of the bank’s predatory lending habits, along with its refusal to stop foreclosure proceedings after admitting to shady practices like “robo-signing.”
The CPC actions took place right as President Barack Obama announced the broadening of the Home Affordable Refinance Program. That federal housing assistance effort now makes it easier for more homeowners to refinance their properties.
The CPC actions today are part of a week-long event organizers are calling “The Mile High Showdown.” The actions are part of the New Bottom Line, a national campaign that’s looking to “restructure Wall Street” by demanding reforms from three major banks: Wells Fargo, Bank of America and Chase.
On Monday, CPC members entered a Wells Fargo branch and demanded bank managers fax a list of their demands to the CEO of the company. This Thursday the group – which is made up of labor leaders, clergy members and homeowners – plans to “occupy” an undisclosed Colorado Wells Fargo Bank branch.
Pay the federally mandated 35 percent tax rate
Concerned by Wells Fargo’s payment of $27.2 billion in bonuses and compensation to its bankers while paying only $1.4 billion in federal income tax in 2010, the delegation is calling on Colorado’s biggest bank to pay back taxpayers. Delegation members are asking Wells Fargo to pay back the community before giving Stumpf another $17.5 million in total compensation, as they did in 2010, by paying their federally mandated 35 percent federal corporate income tax rate instead of an effective rate of 7.5 percent that it paid in 2010.
Over the last ten years, Wells Fargo had the lowest tax rate of the five largest world banks, paying only 24.8 percent on $110.9 billion in earnings while reportedly paying nothing in 2009 after writing off Wachovia debt. With Colorado forced to cut millions of dollars in vital resources to education, members of the community are concerned that Colorado children are being shortchanged in favor of bonuses to millionaires.
Reduce the principle of underwater loans
With an unemployment rate in Colorado still at historical highs, thousands of Colorado families simply can’t pay their mortgages. In many cases buyers were victims of predatory lending practices that caught them in a trap of a high-interest subprime mortgage, while in others they simply saw the value of their houses decrease after the housing market crashed.
Bringing loan principles down to the true market value of homes would not only allow individuals to escape high-interest mortgages but would also infuse the national economy with over $71 billion every year; save families an average $543 per month on their mortgage payments; and help investors come out ahead to fix the foreclosure crisis once and for all. It would also be the right thing to do for a company that took the people’s TARP dollars while using deceptive practices to lure buyers into high-interest sub-prime loans.
Increase small business loan lending
Small businesses in Colorado give families jobs. According to the National Small Business Association 65 percent of net news jobs have been created through small businesses over the last 15 years. With Coloradoan still at historically high unemployment rates, our communities need the big banks to open their vaults to start-ups and aged business alike.
While Wells Fargo has been a recent leader in providing small business loans secured through the federal government’s SBA (7) loan program amongst the big banks, by providing $1.2 billion in Small Business Administration loans, the Coalition is demanding that it and other banks continue to expand their loan programs.
A CNNMoney report showed that small business lending rose between 2006 and 2008 to $711.5 billion dollars but dropped off sharply after the recession began. Lending has continued to drop to nearly 611 billion in 2011.
Divest from private prisons, including GEO
Change your mutual fund strategies so as to divest from GEO Corp and Corrections Corporation of America.
In a July story in Westword, Cristie Drumm, spokeswoman for Wells Fargo, said that bank did not personally own stock but had made mutual fund purchases on behalf of their clients.
According to Yahoo Finance, Wells Fargo & Company is the 3rd largest institutional shareholder of the for-profit prison company Geo, Inc., which operates the Immigration and Customs Enforcement center in Aurora. The bank controls 5.54 percent of Geo through Wells Fargo & Company and 3.87 percent through Wells Fargo Advantage Small Cap Value Fund. Similarly they control significant shares in Corrections Corporation of America, another for profit prison that, according to a 2010 NPR report, has helped fashion immigration laws in Arizona.