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Thread: HSBC facing charges from Atlanta communities over predatory lending

  1. #1
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    Default HSBC facing charges from Atlanta communities over predatory lending

    British bank HSBC --- formerly convicted of funding foreign terrorist groups in violation of the Trading With The Enemy Act, as well as taking in billions from laundering money for drug lords, and yet "punished" with a fine that amounted to only about 7 weeks' profit for the bank, a mere percentage of the profits they made from their illegal ventures --- is now being sued by three Atlanta counties over similar accusations:

    Three Atlanta-area counties have filed a lawsuit claiming that British bank HSBC cost them hundreds of millions of dollars in extra expenses and damage to their tax bases by aggressively signing minorities to housing loans that were likely to fail.

    The Georgia counties’ failure or success with the relatively novel strategy could help determine whether other local governments try to hold big banks accountable for losses in tax revenue based on what they claim are discriminatory or predatory lending practices. Similar lawsuits resulted in settlements this year worth millions of dollars for communities in Maryland and Tennessee.

    Fulton, DeKalb and Cobb counties say in their lawsuit, which was filed in October, that the housing foreclosure crisis was the “foreseeable and inevitable result” of big banks, such as HSBC and its American subsidiaries, aggressively pushing irresponsible loans or loans that were destined to fail. The counties say that crisis has caused them tremendous damage.

    “It’s not only the personal damage that was done to people in our communities,” said DeKalb County Commissioner Jeff Rader. “That has a ripple effect on our tax digest and the demand for public services in these areas.”

    The city of Atlanta straddles Fulton and DeKalb counties, while Cobb County is northwest of the city.

    The lawsuit says the banks violated the Fair Housing Act, which provides protections against housing or renting policies or practices, including lending, that discriminate on the basis race, color, national origin, religion, sex, family status or handicap.
    This seems like a case to watch. Depending on the outcome of this case, it could set a precedent for future prosecutions of banks for illegal/predatory lending practices. I'm interested to see how the charges pan out; it'd be nice to see some of these bigger banks face stricter penalties, although if history is any indication, they will most likely only face minor civil penalties. It's hard to punish a bank with a dollar amount, since they make so goddamn much money anyway.

    But of course, this isn't the first time something like this has happened. Back in 2009, Baltimore officials sued Wells-Fargo for making predatory loans to blacks and Latinos; calling them "mud people," and calling said predatory loans "ghetto loans:"

    Wells Fargo, Ms. Jacobson said in an interview, saw the black community as fertile ground for subprime mortgages, as working-class blacks were hungry to be a part of the nation’s home-owning mania. Loan officers, she said, pushed customers who could have qualified for prime loans into subprime mortgages. Another loan officer stated in an affidavit filed last week that employees had referred to blacks as “mud people” and to subprime lending as “ghetto loans.”

    “We just went right after them,” said Ms. Jacobson, who is white and said she was once the bank’s top-producing subprime loan officer nationally. “Wells Fargo mortgage had an emerging-markets unit that specifically targeted black churches, because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans.”
    Neither time was a coincidence, or methodological failure; both were deliberate, conscious efforts to make money at the expense of minority communities. Tell me again how humanity is "enlightened" and there's no institutionalized racism in America? Or how capitalism always works itself out and the profit motive always guarantees purely ethical actions? lol.
    "I'm sorry
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    Wow. You do not like HSBC do you?
    Big banks will be big banks.
    Quand ils ont dis "Vous vous asseyez," je me suis levé.

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    Wow. You do not like HSBC do you?
    Not terribly fond of international corporations who violate federal trade laws that would plant a normal citizen in prison for life, and yet actually make money off of it as if it were no more than an investment, no.

    Big banks will be big banks.
    And murderers will be murderers, and rapists will be rapists. Guess we should just let all of them off the hook as well?
    "I'm sorry
    For all the things that I never did
    For all the places I never was
    For all the people I never stopped
    But there was nothing I could do...
    "

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    Wow. Not only are you not a fan of HSBC, but you're a little angry too.
    Let me tackle your second response to me. When I said, "Big banks will be big banks," what I mean is that I'm not surprised. I hope that in these courts, whoever is guilty ends up punished. I will not take sides in this because it is not for me to judge on. When the ruling is given or a settlement is reached, then I will judge. Big banks will be big banks, murderers will be murderers, rapists will be rapists, and trolls will be trolls. Each should be dealt with in a fair, calm manner.
    Quand ils ont dis "Vous vous asseyez," je me suis levé.

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    Wow. Not only are you not a fan of HSBC, but you're a little angry too.
    Not angry, just sticking to the point. Though I would be justified if I were angry.

    Let me tackle your second response to me. When I said, "Big banks will be big banks," what I mean is that I'm not surprised. I hope that in these courts, whoever is guilty ends up punished. I will not take sides in this because it is not for me to judge on. When the ruling is given or a settlement is reached, then I will judge. Big banks will be big banks, murderers will be murderers, rapists will be rapists, and trolls will be trolls. Each should be dealt with in a fair, calm manner.
    I agree. Each should be dealt with in a fair, calm manner. That's what the justice system is supposed to do. However. There is indisputable evidence that HSBC's main executives were not just aware of, but involved in, the proceedings of these illegal actions. They have been convicted, and a judgment has been handed down from the Department of Justice --- they are guilty. That's not in question, and so there's no excuse for that. What's in question is:

    (A) the effectiveness of their "punishment" --- a fine that amounts to approximately seven weeks' standard profit for the organizations. Considering they made many times that in profits from their illegal proceedings, a clear incentive is provided here, whether the DoJ intends to provide it or not: the message is that, if you perform grossly illegal felony offenses, and you make enough money off of those offenses, then you can pay a fine (which is only a small percentage of your illegal earnings) and keep the rest of the money you earned illegally. It's like, if I steal $500 from my neighbor, and the government tries me, convicts me and charges me a fine of $50. I still make $450 off the whole situation, and so I have no incentive to not do it again, so long as I make more than $50 doing so.

    (B) The reasoning behind their lenient punishment after their conviction for violating the TwtEA was (literally) that they are too central to the economy to punish, meaning that the DoJ feared the banking industry would collapse if a major bank were to be prosecuted criminally. This also sends a troublesome message, and it's one the DoJ is significantly less likely to not be aware of: that, if you drive the economy hard enough, you can literally commit whatever crime you please, and nobody will stop you.

    The DoJ even sent HSBC a cease-and-desist letter before they were originally charged, saying they wouldn't charge them criminally so long as they ceased illegal action and took steps to prevent it from happening again. Which they agreed to. Then they violated that agreement and broke the TwtEA, and their punishment? A small fine, an apology, and a promise that they'll never do it again. In other words, no incentive whatsoever for them to change their business model to a legal one. In the long run, they haven't lost any money, and they haven't served any jail time. And they won't. That is the issue.
    "I'm sorry
    For all the things that I never did
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    For all the people I never stopped
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    I agree with your little analogy. Made sense to me. But what exactly do you suggest we do about it? Stategic lynchings of DoJ people? Strategic lynchings of HSBC people? Post a thread here, a tweet there, and hope that both sides read it and have an "aha!" moment? The only thing that we can do here, in my opinion, is to boycott HSBC. But considering their immense wealth, I would say that the difference would be minimal to them.

    Then again, power to the people, right? Before Obama bans guns from us, maybe we should turn our MP7 scopes against these bankers. I mean, what the hell? We're damned if we do and damned if we don't. As many a punk band once said, "Rise up!"
    Quand ils ont dis "Vous vous asseyez," je me suis levé.

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    I agree with your little analogy. Made sense to me. But what exactly do you suggest we do about it? Stategic lynchings of DoJ people? Strategic lynchings of HSBC people? Post a thread here, a tweet there, and hope that both sides read it and have an "aha!" moment? The only thing that we can do here, in my opinion, is to boycott HSBC. But considering their immense wealth, I would say that the difference would be minimal to them.
    You can't directly combat an industry-spanning multinational corporation any more than you can directly do anything about what the president says or does. But you can (A) obtain a clear and rational understanding of the current situation, and (B) use that understanding as an example and a reference for future cases. Any time a relevant issue (or politician) comes up to vote at the local level, you can vote and help campaign --- based on your understanding of the political environment --- against things that help further actions like this (such as deregulation) and help promote things that restrict unlawful activity (such as stricter finance reform). And if a politician doesn't perform to your satisfaction with regard to these issues, you can vote or campaign against them. If they take donations from companies like HSBC and Wells-Fargo, then you can contribute to their opponent's campaign and try to get them ousted.

    Then again, power to the people, right? Before Obama bans guns from us, maybe we should turn our MP7 scopes against these bankers. I mean, what the hell? We're damned if we do and damned if we don't. As many a punk band once said, "Rise up!"
    Our forefathers would be ashamed of us today if they saw how our understanding of "power" has devolved into a synonym for "gun ownership." Any time we don't like the way our government is run, you hear out-of-touch morons calling for armed rebellion. What will it change to depose one flawed leadership and instill another, if you don't address the flaws of that leadership? There are cases where a violent revolt is necessary (in the case of a government which actively executes, enslaves or slaughters its people, for instance), but at this point it would be a waste of time and life, and it would solve nothing even if it did work (which it wouldn't).
    "I'm sorry
    For all the things that I never did
    For all the places I never was
    For all the people I never stopped
    But there was nothing I could do...
    "

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    Mind you, this nation wouldn't exist if some poor farmers just decided to listen to the king. This nation was founded in a violent way, back when swords were honorable and muskets were dangerous. If George Washington met Static Martyr back in the 1770s and Martyr said, "You're an out-of-touch moron calling for rebellion," I have a feeling George wouldn't have given a shit. Remember, the Brits tried to restrict gun ownership when they were in charge. In fact, these were some of the rebellion's causes: high taxes, restrictive government, restrictions on the right to bear arms, and a ruler who couldn't lead. All of these remain current issues as Obama points us toward Europe and says "Socialism good; freedom bad!" Ever read the book 1984?

    So, in the other part of your argument, you say that what we pught to do is be informed and take small actions. Gotcha. Done. Thanks to you, I know all there is to know about HSBC, and this here is indeed a small action.

    In the end, I don't support them. But what the friggin fuck am I supposed to do about it? It won't go away, nor will it fit under the rug, and nor will it be fixed from the ground up.
    Quand ils ont dis "Vous vous asseyez," je me suis levé.

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    This nation was founded in a violent way, back when swords were honorable and muskets were dangerous. If George Washington met Static Martyr back in the 1770s and Martyr said, "You're an out-of-touch moron calling for rebellion," I have a feeling George wouldn't have given a shit.
    That's exactly what I'm talking about. Throughout a nation's history, there will be times when civil dissent is necessary, and there will be times when armed rebellion is necessary. If you can explain to me how an armed rebellion will (A) solve our current crisis, (B) correct the systematic errors which *lead* to our current crisis, and (C) prevent those errors from corrupting any new system we might put up in place of the current one, then I'm all ears. Otherwise, I'm dismissing the idea of an armed rebellion as a solution to our current predicament out-of-hand. Our founding fathers had at least a rudimentary concept for establishing a new government long before they ever picked up a weapon and went out to fight. What is your proposal for this new government, after we overthrow the current one? How will it be any different from this one, in the long run? How will it avoid the pitfalls that have ruined this one, without cutting corners elsewhere in the process?

    To further explain why what you said is horrendously stupid, let's go to the Declaration of Independence once again:

    "Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes..." --paragraph 3, Declaration of Independence
    Meaning, "make DAMN sure that you're serious before you go blathering about an armed rebellion." They go on to explain what, exactly, the terms that lead up this particular rebellion were, though they were decidedly more specific than you were when you said:

    high taxes, restrictive government, restrictions on the right to bear arms, and a ruler who couldn't lead.
    Those are all very subjective terms. You point to "high taxes," and I ask, "for whom?" Corporations are paying the lowest effective tax rate in at least 30 years. They love to whine that we have the "highest nominal tax rate of any country" (39.2 percent), but the fact is that our effective tax rate is much lower, and varies by industry: the average manufacturing industry corporate tax rate is around 26%, real estate is only 23%, mining is 18%, and utility companies pay a mere 14% effective tax rate.

    Working-class citizens don't pay too terribly much taxes; our lack of wealth is primarily due to the income gap between corporate profits and wage benefits; the highest-profit manufacturing and retail jobs tend to have the lowest wages (in fact, minimum wage --- currently $7.25/hr --- is actually only worth $6.77/hr in raw purchasing power compared to its value in 2009, and real hourly earnings for employees have decreased in value even further since 2009, while corporate profits increased by nearly $528 billion just between Q2 2009 and Q4 2010). All this, in spite of the constant unfounded assertions from libertarians that the earnings of successful corporations will "trickle down" in the forms of higher wages for workers.

    So the economic problem, as I understand it, has little to do with taxation and more to do with how we distribute the cash that's come into the economy since the recovery began. Corporations are making record profits --- Exxon-Mobile broke a(nother) universal record for highest corporate profit in history earlier this year, reporting $16 billion in Q3 earnings for 2012, after initially breaking the record in 2008 with $14.83 billion in Q3 2008. So why don't working-class EM employees see any of that money? Why do their wages still give the appearance of a weak economy? It's not because of "taxes." It's because they are pocketing the money themselves and it's not "trickling down" as we were promised; we're giving huge cuts and benefits to corporations so that they can make money, and in return we're asking nothing, just hoping that they'll "do the right thing" and expand their businesses out of the goodness of their hearts, completely ignoring the financial incentives to adhere to a stable, steady economic model as opposed to a risky expanding one (if you have a goose that lays golden eggs, why would you risk losing it?); and so they make tons of money because of the extra perks we give them (many of which involve lower taxes, not higher taxes), and then they don't share the perks, so there is not as much cash flow trickling down as there is trickling up, and so corporate profits rise while wages drop. Thus, income gap.

    Taxes as they are now actually aren't that much of a burden on working class citizens, in terms of how much they bring home (I can attest to this, as I don't get any special deductions and I've been a tax-paying full-time employee since 2006).

    In the end, I don't support them. But what the friggin fuck am I supposed to do about it? It won't go away, nor will it fit under the rug, and nor will it be fixed from the ground up.
    You can do whatever you please, for all I care. I'm just laying out my ideas here. If you disagree, you're free to criticize, just know that I'm going to defend my ideas.
    "I'm sorry
    For all the things that I never did
    For all the places I never was
    For all the people I never stopped
    But there was nothing I could do...
    "

  10. #10
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    Alright. I shall seriously debate the idea of the USG: United States of Godxilla. This nation would run itself on the Constitution plus the Amendments, and would add but one sentence: Congress shall make no law without first consulting the Constitution and, after debate in Congress, add a provision to each law which states why the Constitution deems it appropriate. Boom. Gone is the safety net for the poor. Gone are the Congress pensions. Unless the Constitution has a reason wht Congress should pass this bill, it should never be passed. For example, after reading a bill, the Congress leaders would then search the Constitution, and find a specific part that enables the bill.

    An answer to your 3 questions:
    A. Armed rebellion may solve this current issue by creating an atmosphere of clean slates. HSBC is powerful in the USA, but to the USG, it's just another bank that probably would have helped the US government anyway. Unlike the US, with a history of catering to big banks, the USG would have fresh standards. It would solve the fiscal cliff by creating a nation that has only war debts. The USA can go fuck itself; we've got the cash.
    B. My previous answer touched on it. They cannot dick around in the USG, because the fortune soldiers, farmers, hunters, and terrorists that make up our army and government have no record of tolerating shit.
    C. It would prevent bullshit like this for about 200 years (if we last) by learning from our predecessors. The main cause of the Revolution was the king. 200 years later, the USA has learned and still remains kingless.
    On to rebellion itself. The Constitution does say that. And I agree. But these aren't normal times. Our government is at an all-time high of screwing the people. Hamilton once said, "A national debt... If it is kept small... Will be to us a national blessing." Well it ain't small, Hamilton. Any banker would be horrified by $16 trillion in debt. Furthermore, Jefferson once said two things: "I like a little rebellion now and then" and "Sometimes the Tree of Liberty" must be cleansed and clipped by the blood of the citizens. That is, if people are not afraid to die for their rights, then they will not care once these rights are slowly taken away. Why do Africans, Arabs, and Central Anericans revel so much? Because life as a farmer is not precious, but the ability to live in a society that fits their view of freedom is.
    Finally, taxes. I find it funny that liberals bitch about rich people using tax deductions, and then fight to defend tax deductions at every turn. Mitt Romney pays 15% in taxes. Some people pay 39%. French people pay 75%. Taxes can be brutal, or, if you're lucky, they can be decent. Most of us aren't that lucky. High taxes are just two words without a concrete meaning, but when taxes become a political tool, then clearly, they will continue to get higher no matter which party is in power.

    I understand that this is a long paper on rebellion. However, at the current moment, I do not advocate it. I simply wish to point out reasons why it is not as bad as people might think. In order to advocate it, I first need to think up a fancy name and writw a full book on the subject. Then I gather weapons. It is at this point that I would advocate rebellion. Thank you.
    Quand ils ont dis "Vous vous asseyez," je me suis levé.

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