The Problem with Big Banks
In a trend that began many years ago, big banks – banks like Wells Fargo, CitiMortgage, JP Morgan Chase, Bank of America, HSBC, Bank of New York Mellon and others – have greatly increased profits, running roughshod over consumers in the process. Treinen Law Office represents consumers against the big banks. We have handled many such lawsuits. We have gained a unique level of knowledge about how big banks really work. We are committed to using that knowledge to the advantage of consumers who continue to be taken advantage of.
Predatory practices by big banks have been well documented by both the media and federal regulators. See e.g. Wolff-Mann, Ethan, Every Wells Fargo Consumer Scandal Since 2015: a Timeline available at https://finance.yahoo.com/news/every-wells-fargo-consumer-scandal-since-2015-timeline-194946222.html; Blumenthal, Jeff, Bank Notes: Bank of America Leads in Big Banks in Fines; More Wells Fargo Turnover available at https://www.bizjournals.com/philadelphia/news/2018/03/26/bank-of-america-madoff-fines-wells-fargo-execs.html. But despite what seem like huge fines to most Americans, the predatory behavior continues. No top executives from the big banks are ever criminally prosecuted. And the fines are pocket change compared to the profits earned.
One example of big bank misbehavior is particularly illuminating. The United States government required many of the big banks to participate in in the Homes Affordable Modification Program (“HAMP”) in exchange for receiving billions in bailout funds in response to the Great Recession of 2008-2009. HAMP was intended to help homeowners save their homes. See United States Treasury, Making Home Affordable available at https://www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/mha/Pages/hamp.aspx. But the banks themselves were given the job of instituting HAMP. They were charged with overseeing implementation of and compliance with the program. See Feiden, Douglas, Bank of New York Mellon Scored $3B Bailout, also Oversees Entire Program, New York Dailey News (Feb. 22, 2009) available at http://www.nydailynews.com/news/money/bank-new-york-mellon-scored-3b-bailout-oversees-entire-program-article-1.390935. Government oversight was limited.
The big banks did not keep their end of the deal. Although they were bailed out, homeowners continued to be unfairly foreclosed on. Because of institutional failures by big banks and the “servicers” they hired to collect on their mortgages – companies like Ditech, Shellpoint, Specialized Loan Servicing, Ocwen, etc. — a fair loan modification process was never truly put in place, and HAMP has largely been viewed as an utter failure, with few homes saved. See e.g. National Consumer Law Center, Homeowners Need Mandatory Loan Modifications and Expanded Access to Mediation; Current Programs Fall Short available at https://www.nclc.org/images/pdf/foreclosure_mortgage/mortgage_servicing/loanmodificationonepage091109.pdf. These institutional failures have caused great harm to American families.
Many believe that reckless greed by big banks causes the Great Recession. Many homeowners came out of the Great Recession with a net worth that was significantly reduced. The net worth of most families is tied up in their home. But the big banks came out of the Great Recession with bailout funds and now have amassed an even bigger share of our economy. This has resulted in one of the biggest wealth transfers in the history of the United States. The middle class is poorer. The big banks are richer. And the big banks remain as arrogant and predatory as ever.