I’m not being all that flippant. I suspect this crash is going to make the last one look like a rehearsal.
At the possibility of winning back the House and the Senate. (I get geek chills, just thinking about it.) Here’s why.
Some of the policies on the table:
- Expanding Social Security;
- Expanding Medicare to age 50 and up;
- Anti-trust emphasis in the DoJ (be still, my heart!);
- Putting honest-to-God liberals into every open seat on the Supreme Court;
- Paid parental leave;
- Raising taxes on the wealthy;
- No-debt college (I’m too lazy to go into it, but making this income-based is actually more effective at redistributing wealth than free college for everyone);
- Big bump in the minimum wage;
And lots more.
David Dayen wrote a fascinating series on likely fraud by major banks in the penny stock market. If you’re an investor, you will want to read this:
All seven installments can be found here.
Part 1: The Money is Gone
Part 2: Big Players, Little Stocks, and Naked Shorts
Part 3: Naked Shorts Can’t Stay Naked Forever (or can they?)
Part 4: Calling the SEC
Part 5: Turning Up Like a Bad Penny
Part 6: Were Paper Losses the Goal All Along?
Part 7: The Half Billion Dollar Glitch
— USA TODAY (@USATODAY) September 27, 2016
The Arizona Republic just endorsed Hillary Clinton, its first Democratic endorsement ever. https://t.co/FK3ssZVfBC
— Gabriel Debenedetti (@gdebenedetti) September 28, 2016
I figured as much, especially the rearranging of debit card charges for overcharge fees. I’ve had that happen to me:
Most Americans were shocked when they learned that thousands of Wells Fargo employees had opened millions of fake accounts.
People who work at other banks weren’t surprised at all.
Nearly a dozen current and former employees at large and regional banks such as Bank of America (BAC), Citizens Bank, PNC (PNC), SunTrust (STI), and Fifth Third (FITB) tell CNNMoney that a sales obsession pervades their banks. They say they too are under immense pressure to get customers to open multiple accounts.
They described a focus to push as many different products — think debit cards or new online accounts — as they can, an industry practice known as cross-selling.
“Wells Fargo is not the exception (with its) absurd sales culture,” said one former manager of two large regional banks.
Related: 5,300 Wells Fargo workers fired over 2 million phony accounts
No other major banks have been accused by regulators of widespread opening of phony accounts like Wells Fargo (WFC) has been.
But Thomas Curry, one of the country’s chief banking regulators, said that “banks are under enormous margin pressure. That could be a bad environment.”
Curry, the head of the Office of Comptroller of the Currency, told a Senate panel this week that the agency is investigating whether other banks have employed high-pressure sales tactics that led to fake accounts.
One former banker at a regional bank told CNNMoney he witnessed the practice at his company.
“The customers wouldn’t even know,” said the banker, who insisted his name not be used. “Wells Fargo isn’t the only one. This is an industry-wide problem.”
Another scam this banker witnessed involved employees rearranging debit charges on customer accounts to maximize the size of the overdraft fees they experienced.
This guy will never get another job in banking, either:
“They ruined my life,” Bill Bado, a former Wells Fargo banker in Pennsylvania, told CNNMoney.
Bado not only refused orders to open phony bank and credit accounts. The New Jersey man called an ethics hotline and sent an email to human resources in September 2013, flagging unethical sales activities he was being instructed to do.
Eight days after that email, a copy of which CNNMoney obtained, Bado was terminated. The stated reason? Tardiness.
One former Wells Fargo human resources official even said the bank had a method in place to retaliate against tipsters. He said that Wells Fargo would find ways to fire employees “in retaliation for shining light” on sales issues. It could be as simple as monitoring the employee to find a fault, like showing up a few minutes late on several occasions.
“If this person was supposed to be at the branch at 8:30 a.m. and they showed up at 8:32 a.m, they would fire them,” the former human resources official told CNNMoney, on the condition he remain anonymous out of fear for his career.
This was a thing of beauty, to watch Sen. Warren give this guy the treatment he deserves:
And if you really want to torture yourself, you can watch her interview last night with Rachel Maddow in which she says that yes, there were criminal referrals against banks in the 2008 crash — and she wants to know why the FBI didn’t charge them:
Now, I have long since accepted that Obama believed what was left of the financial and economic system would not survive criminal charges. Who knows? I was not in his position, I don’t know. But I do know he told the American people there was nothing that rose to the level of criminal acts.
To add a little context: Most bank tellers make so little money, they qualify for food stamps.
Wells Fargo Bank has agreed to pay the largest fine in history and has fired 5,300 employees for creating “ghost accounts” for customers without their authorization. According to the CFBP release, bank employees opened credit card accounts and other accounts for customers. In some cases, they transferred money from the customer’s existing account into the new… Continue Reading →
(Photo/Courtesy aboblist) by Annie Waldman ProPublica, July 3, 2016, 9 a.m.
Amid a haze of grief after her son’s murder last year, Marcia DeOliveira-Longinetti faced an endless list of tasks 2014 helping the police access Kevin’s phone and email, canceling his subscriptions, credit cards and bank accounts, and arranging his burial in New Jersey.
And then there were his college loans.
When DeOliveira-Longinetti called about his federal loans, an administrator offered condolences and assured her the remaining balance would be written off.
But she got a far different response from a New Jersey state agency that had also lent her son money.
“Please accept our condolences on your loss,” said a letter from the Higher Education Student Assistance Authority to DeOliveira-Longinetti, who had co-signed the loans. “After careful consideration of the information you provided, the Authority has determined that your request does not meet the threshold for loan forgiveness. Monthly bill statements will continue to be sent to you.”
DeOliveira-Longinetti was shocked and confused. After all, the agency features a photo of Governor Chris Christie on its website, and boasts in its brochures that its “singular focus has always been to benefit the students we serve.”
But her experience with the authority, which runs by far the largest state-based student loan program in the country, is hardly an isolated one, an investigation by ProPublica, in collaboration with the New York Times, found.
New Jersey’s loans, which currently total $1.9 billion, are unlike those of any other government lending program for students in the country. They come with extraordinarily stringent rules that can easily lead to financial ruin. Repayments cannot be adjusted based on income, and borrowers who are unemployed or facing other financial hardships are given few breaks.
New Jersey’s loans also carry higher interest rates than similar federal programs. Most significantly, the loans come with a cudgel that even the most predatory for-profit players cannot wield: the power of the state.
New Jersey can garnish wages, rescind state income tax refunds, revoke professional licenses, even take away lottery winnings 2014 all without having to get court approval.
“It’s state-sanctioned loan sharking,” said Daniel Frischberg, a bankruptcy lawyer. “The New Jersey program is set up so that you fail.”
The authority has become even more aggressive in recent years. Interviews with dozens of borrowers, who were among the tens of thousands who have turned to the program, show how the loans have unraveled lives.
The program’s regulations have destroyed families’ credit and forced them to forfeit their salaries. One college graduate declared bankruptcy at age 26 after struggling to repay his debt. The agency filed four simultaneous lawsuits against a 31-year-old paralegal after she fell behind on her payments.
Another borrower, Chris Gonzalez, couldn’t keep up with his loans after he got non-Hodgkin’s lymphoma and was laid off by Goldman Sachs. While the federal government allowed him to suspend his payments because of hardship, New Jersey sued him, seeking nearly $266,000 in payments, and seized a state tax refund he was owed.
One reason for the aggressive tactics is that the state depends on Wall Street investors to finance student loans through tax-exempt bonds and needs to satisfy those investors by keeping losses to a minimum.
Loan revenues also cover about half of the agency’s administrative budget.
In 2010, the agency filed fewer than 100 suits against borrowers and their families. Last year, it filed over 1,600 suits. (Some could result from federal loans handled by New Jersey, though such loans make up just 4 percent of the agency’s portfolio.)
The cases are handled by debt collectors, who can tack on another 30 percent in fees on top of the outstanding debt.
Marcia Karrow, the authority’s chief of staff, said, “the vast majority of these borrowers are happy with the program.” She added that New Jersey’s loans had “some of the lowest default rates” in the country. But when asked to produce the annual default rates, the agency sent ProPublica and the Times data only for students with strong credit scores, making it impossible to calculate the overall rate. (Read their responses to our questions.)
A spokesman for Gov. Chris Christie said the governor does not control the authority and declined to respond to questions about the loan program. But Christie appointed its executive director, Gabrielle Charette; he also has the power to appoint at least 12 of the agency’s 18 board members and can veto any action taken by the board.
Besides administering the loan program, the authority provides financial aid counseling, conducting hundreds of financial aid nights at New Jersey high schools, where it offers advice about paying for college, including pitching its own loans.
DeOliveira-Longinetti, who emigrated from Brazil and had long worked as a nanny while raising her son as a single mother, always knew that paying for college would be a challenge. Even after marrying her husband when Kevin was in middle school, she knew that their combined income would not be enough to cover the costs. But a friend told her about New Jersey’s program. That, along with a combination of scholarships, grants, and other loans, allowed Kevin to enroll at the University of Vermont.
Since her son’s murder, DeOliveira-Longinetti has made 18 payments to New Jersey. At $180 per month, she has about 92 to go.
“We’re not going to be poor because of this,” she said. “But every time I have to pay this thing, I think in my head, this is so unfair.”
For decades, states served as middlemen for federal student loans. Most of the loans were made by banks and were handled and backed by regional and state-based agencies as well as by the federal government. The arrangement was unwieldy, expensive and marked by scandal.
After Pennsylvania’s student loan agency lost a public records lawsuit in 2007, documents revealed that the agency had spent nearly $1 million on things like fly-fishing, facials and falconry lessons.
That same year, New Jersey’s agency was caught in what amounted to a kickback scheme. The state attorney general found that the agency had improperly pushed one company’s loans in exchange for annual payments of $2.2 million. A subsequent investigation by the state’s inspector general found that the agency was in “disarray.”
In 2010, Congress and the Obama administration decided to effectively eliminate the role of state agencies by having only the federal government lend directly to students.
Some states, like California, decided to downsize and transferred their federal loan portfolios. Others, such as Pennsylvania, won contracts from the federal government to service debt from the federal loan program.
But New Jersey chose a different path. In the years leading up to the end of the federal program, New Jersey sharply expanded its loan program, slowly replacing the federal loans it once handled with state loans. From 2005 to 2010, loans from the agency nearly tripled, to $343 million per year. Since then, the agency has reduced its loans by half, but its outstanding portfolio has remained roughly the same, about $2 billion.
Karrow said the growth of New Jersey’s program was simply a result of both the growing number of students and the rising cost of tuition. But in fact, college enrollment and tuition have not grown as rapidly as the program’s size.
Lawsuits on the Rise for the New Jersey Higher Education Student Assistance Authority