WaMu's $375 billion in Community Reinvestment Act loans was for pikers! A reader writes:
Here is a direct quote from a full-page ad placed by Bank of America in today's (2/4/09) WSJ under the heading "Bank of America's Promise to America:"
"We began a 10-year, $1.5 trillion investment in low-to-moderate income and minority communities — the largest investment of its kind in America."
This from a company that would be bankrupt without the government bailout. Smacks of a CRA quid pro quo to me. I wonder who picks up the "promise" on this one.
One-and-a-half-trillion here, one-and-a-half-trillion there, pretty soon ... All I can say is that If Everett Dirksen were alive today, he'd be spinning in his grave.
... Actually, I can say more.
Note that this is a full page ad not in Mother Jones or the New York Times, but in the Wall Street Journal.
You might think that now that Bank of America wants to get even more bailout money from the taxpayers, they'd ixnay mentioning to Wall Street Journal subscribers their earlier promise to lend $1.5 trillion imprudently, and that now they'd instead be talking about how the taxpayers are likely to get their money back in the long run.
But that's not how the contemporary worldview works. Everybody is a Kool-Aid drinker, including WSJ subscribers. No, trillion in Community Reinvestment Act pledges shows you are a good bank, not one of those evil people who didn't pour hundreds of billions down the CRA rathole. So, your moral superiority makes you worthy of getting even more money out of the taxpayers.
The $1.5 trillion dollar pledge was bragged about April 28, 2008 by B of A executive Liam McGee at a CRA hearing in Los Angeles evaluating B of A's purchase of notorious subprime crater Countrywide (talk about a convergence of the walking undead!). As you might recall, everybody in the world became aware that the housing bubble had popped in the summer of 2007, but nine months later B of A was pledging to pour $1.5 trillion down the CRA rathole. And 9 months later, in 2009, they're paying a lot of money to boast about their $1.5 trillion pledge to WSJ readers.
Now, the government can't force bankers to risk $1.5 trillion. All that the government and the "community organizers" can do is select and nurture a now generation of bankers who think pledging $1.5 trillion to meet CRA goals is a great idea because that's what all the bigshot bankers who got permission to buy up other banks have done for the last 15 years. If you want to be a winner, you play ball with ACORN and company.
Sorry about quoting at length, but if I edited out anything, you'd think I was altering the meaning by removing context. No, it's really this egregious:
$1.5 Trillion Community Development Goal
Our continuing commitment to community development will not waver. As you know, in 2004, we raised the bar when we announced our ten-year, $750 billion community development goal. Today, we are raising that bar.
I am proud to announce Bank of America’s new, and unprecedented, 10-year goal of $1.5 trillion for community development lending and investments. This is the largest community development goal ever by any company in America. In coming years, this goal is certain to enhance quality of life for millions of Americans in need, by:
” helping finance construction of affordable housing throughout the nation,
” providing loans and other needed capital to small businesses,
” supplying consumer loans, including housing finance, for low- and moderate-income and minority borrowers, and
” financing economic development for communities in need.
In addition, our Charitable Foundation is raising its philanthropic giving goal from $1.5 billion to $2 billion over 10 years. This is the most ambitious long-term corporate philanthropic goal ever announced by any company. We are setting this goal despite uncertain economic times.
We are optimistic about the future prospects of the housing market and the enhanced mortgage services Bank of America will offer after its acquisition of Countrywide . In announcing our new, $1.5 trillion community development goal, industry-leading mortgage loan practices and new foreclosure mitigation strategies, we ensure that our customers will continue to benefit from Bank of America’s responsible and principled approach to doing business. We encourage others in the industry to follow our lead.
Andrew Plepler will now give more details on our community development and philanthropic activities.
* * * * *
Good morning. My name is Andrew Plepler. Bank of America’s commitment to strengthening the health and vitality of communities stems from a deeply ingrained philosophy and a long tradition of demonstrating corporate citizenship through community development and philanthropy. In particular, by partnering with nonprofits and community leaders … we concentrate on improving the lives of low- and moderate-income and minority families and neighborhoods.
Our company has received five consecutive Outstanding CRA ratings … reflective of our community development focus. In addition, the Bank of America Charitable Foundation is the second largest corporate donor in the world.
For many years, Bank of America has been recognized for its community development work. The vast majority of these activities are the results of our line of business products and services we provide to customers and communities. In more specific areas of community development, we have leveraged our knowledge and expertise to become a national leader in affordable housing, small business lending and neighborhood revitalization. And, we are recognized for our results in creating sustainable community and economic development through public—private partnerships.
Since 2004, our company has been delivering on an ambitious 10-year goal of $750 billion for community development loans and investments. To provide just a few ”proof” points, consider some of our 2007 results:
” More than $100 billion in community development loans and investments to low- and moderate-income and minority families, business and communities;
” Financing, developing and rehabbing nearly 22,000 units of affordable housing;
” $25.6 billion in small business lending and the #1 SBA lender for the 10th consecutive year; and
” Investing more than $84 million in Community Development Financial Institutions.
Because we also believe that affordable, quality rental housing is critical to our national housing stock, we have been a leader in financing to non-profit and for-profit developers. Bank of America remains a strong player in this space and has expanded its capability to direct Low Income Housing Tax Credit investments to ensure continuity and capacity in the market.
In addition to our community development goal, the Bank of America Charitable Foundation set an unprecedented $1.5 billion goal in 2004 for philanthropic giving over 10 years. Since then, we have invested more than $550 million toward increasing the health and vitality of neighborhoods throughout our franchise. Through signature programs like our Neighborhood Excellence Initiative, we are helping increase the capacity of community organizations, develop current and next generation community leaders and create significant impact in the communities we serve.
By supporting organizations such as hospitals, universities and arts institutions, we are helping to create jobs and stimulate economic development to enhance the quality of life in diverse neighborhoods. In addition, our associates provide tremendous support as volunteers in the communities where we live and work.
A local example of a not-for-profit we have supported is Bethel New Life. This organization is empowering individuals, strengthening families and building a sustainable community. Bethel brought in more than $110 million in new investments to a credit starved community and developed more than a thousand units of affordable housing in Chicago’s west side. Bethel’s President and CEO, Steven McCullough attended leadership training and the organization received a $200,000 grant.
Some of our 2007 philanthropic activities include:
” More than $200 million in charitable giving;
” Grants were made to 4,800 nonprofits for education and youth programs, health and human services, community development, arts and culture, and the environment;
” More than 50% of our grants were CRA-qualified, directly benefiting LMI individuals or neighborhoods; and
” Contributing more than 650,000 employee volunteer hours and more than $20 million in charitable donations by associates to help meet pressing community needs.
We recognize the needs are great. We pledge our on-going support — as we have in the past — in addressing community needs, especially in challenging economic times as we now face. To that end, I am proud to announce that the Bank of America Charitable Foundation and Countrywide will provide $35 million in grants and program-related investments as part of our neighborhood stabilization program. These funds will help local and national non-profits engaged in foreclosure prevention and to purchase vacant single-family homes for neighborhood stabilization.
At Bank of America, we have a remarkable franchise dedicated to leveraging our broad national reach … our financial capacity and capability ... and our deep commitment to strengthening communities. We take our leadership role very seriously as demonstrated by our $750 Billion goal for community development and $1.5 Billion goal for Philanthropy. We hold ourselves accountable to create real change, and we publicly report on our progress toward these goals.
I want to give two other specific instances where Bank of America serves as a good corporate citizen.
First is supplier diversity. Bank of America is committed to fostering diversity in our communities and has incorporated that commitment as a core value in our business practices. We developed an aggressive program of outreach and business development to grow opportunities. We are proud that more than 16% of our company’s sourceable spend in 2007 were with firms that are majority-owned by women, minorities or people with disabilities.
Second is the environment. Bank of America is recognized as a leader for its advocacy of efforts to reduce greenhouse gases and support responsible, sustainable development.
We have dedicated $20 billion over 10 years for an environmental initiative to support these efforts. We recently announced that Bank of America has adopted the ”Carbon Principles, guidelines for lenders to promote cleaner energy technologies. We also are very proud that our new Bank of America Tower in New York City has been recognized widely as one of the most environmentally friendly buildings in the world.
In short, Bank of America is and will continue to be committed to the communities that we serve. By providing local, relevant support to neighborhoods, we will continue to create opportunities for our customers, associates, and communities to grow and prosper.
We know that we are most effective by partnering with nonprofit organizations and community leaders to identify and address the challenges that together we can overcome.
It's worth rereading to try to figure out how much ends up in the pockets of the "community organizers" that can protest the merger. I don't know, but it's not a small number.