According to Frank Rich of the New York Times, Wall Street is a bigger threat to the United States than Al Qaida. It's an exaggeration, of course, but conveys the degree to which some of the smartest people in the country have come to loathe an industry that puts itself before every other interest, screwing the little guy even as they grow fat off the misfortune of others. There are, of course, countless extremely moral, decent, and charitable people on Wall Street who devote their resources to the public good. I personally know many of them. But as an industry, Wall Street is becoming a graveyard of ethics and a carnival of consumption.
Nearly twenty years ago, as Rabbi at Oxford University, I began writing about the potentially negative consequences of the growing Wall Street behemoth. I questioned the rise of an industry that pays so much for so little, and how it was pulling my Oxford students away from law, teaching, and medicine to careers in finance and banking. But even I was taken aback by the latest actions of JP Morgan Chase, as reported in the Huffington Post.
Under a headline that read "JPMorgan Chase Argues Against Mortgage Modifications, Citing Sanctity Of Contracts," the story detailed how David Lowman, CEO for home lending at the bank, was fighting against a government program designed to have lenders and investors decrease the amount of money owed on homes whose value had fallen significantly below the amount of the original loan. "Like all loans, mortgage contracts are based on a promise to repay money borrowed. Importantly, there is no provision in the mortgage contract... that the lender will... reduce the repayment amount if the value of the... home... depreciates."
Interesting argument, until you remember that this is the same bank for whom the government bent all the rules that allowed it to make so many more billions. JP Morgan Chase received $25 billion of TARP money in a tax payer-funded bailout and, although it has since been repaid, it facilitated the bank's enormous subsequent growth. But the bank received a lot more government assistance than even that. As the Huffington Post reported, "JP Morgan Chase also received $41 billion in cheap funding through a tax payer-backed debt issuance program from the FDIC, money that has not been repaid." To compound the insult, JP Morgan Chase swallowed the mammoth Bear Stearns and Washington Mutual in 2008 in a deal whose risk and cost was also born by the taxpayer. JP Morgan Chase got the deal of the century, fitting too since, as it turns out, both Bear, who collapsed through greed, and JP Morgan Chase, who accept bailouts but then when it comes to denying assistance to struggling home owners cites the sanctity of contracts, seems to excel in blood-sucking avarice.
So, here we have a gargantuan bank that made untold billions for itself through sweetheart government deals and bailouts, while having the audacity to lecture struggling homeowners on honoring their commitments. They're allowed to be bailed out by taxpayers who have to assume the responsibility of their shoddy investments. But the little guy who is struggling to keep a roof over his head is out of luck. The hypocrisy is laughable, but we shouldn't be surprised. This kind of heartlessness and arrogance is par for the course for this banking goliath where, it seems, money is the deity at whose altar JPMorgan Chase and Bear Stearns executives regularly prostrate themselves.
I have already written two articles about my own horrific experiences with JP Morgan Chase, leading to my bringing a lawsuit against Bear Stearns. It concerns how one Matt Zimmerman, who sought to take over my accounts at Bear after they had collapsed under its Chairman, Ace Greenberg, tried to triple charge me for fees related to the account. When, after losing considerable sums of money at the bank over so many years I finally stood up for myself and demanded that my accounts at least be restored to their pre-Zimmerman position, a pittance that would have cost the bank something in the range of about $3500, Ace Greenberg, a friend of mine for nearly ten years, called and threatened me to let the matter drop. You can read the full article on the Huffington Post.
I had originally met Greenberg when he sought involvement in the finances of Michael Jackson, with whom I was close. Was I a convenient vehicle for drawing closer to Michael? Whatever the motive, for years I did not complain as my accounts declined and Greenberg gave me, at most, a few sporadic minutes to discuss them. I respected Greenberg's commitment to philanthropy. But once the bank resorted to gouging, bullying, and threatening me, taken aback, I had had enough and filed suit.
It seems that Bear's executives will say anything in order to abscond from their responsibilities. Judging from the example of Wall Street executives' behavior before Congressional panels - the Chuck Prince, Bob Rubin, Citibank testimony of last week was positively painful - I am, sadly, not surprised by Zimmerman and Greenberg's actions. One of the interesting things about Wall Street bankers is how willing they are to feed on each other. Zimmerman pursued me aggressively even though he knew that the Chairman of his own bank was my account manager. But then again, Wall Street is a culture whose only loyalty is to money. But I believe that the time will come - and sooner rather than later - when the actions of Wall Street's executives will come fully to light. History has consistently shown, it's rarely the crime and nearly always the cover-up that gets you.
I am a Rabbi, not a fighter. But there comes a time when, as a father of nine, you have to stand up to being gouged by Wall Street. That time has come for me and it must come for the American people as well. We must not allow JP Morgan Chase and other Wall Street banks to get away with taking billions in bailouts while refusing to modify the loans of everyday, hardworking people.
I have earlier written about the horrors of even trying to get through to anyone at Chase to discuss a mortgage modification and how, amid the billions in TARP money to ease people's mortgage burdens, Chase seems intent on finding every reason to deny modifications so that they can callously seize people's homes, as the New York Times graphically illustrated on January 2, 2010.
In my own article, I gave a brief taste of what it's like to even get a mortgage loan officer on the phone, or have them stay on the phone without hanging up on you. It's a rare achievement. Good luck, America. Maybe the billions of dollars that the bank is paying its executives has come at the expense of hiring a few more people at the bottom of the totem pole whose sole duty is to answer customer service inquiries. Perhaps a tax-payer-funded Ferrari is more of a necessity these days.
The latest gambit by Chase, as I've discovered, is where they pass the buck on denying any mortgage application by telling you that their 'investor' won't agree to it. Yet, you guessed it, they never reveal who the investor is or how you may contact them. I've covered this 'silent-investor-doesn't-agree-to-your-modification' scenario on my radio show on WABC, 770 AM in NYC. I've asked Tom Kelly and Mike Fusco, the PR people at Chase, what the bank's policies are regarding the anonymity of these investors. Specifically, I wanted to know why Chase took tens of billions in taxpayer money to help people receive loan modifications if the modifications themselves can be denied by nameless investors. Doesn't sound fair, does it? The reply, as you might have guessed, was silence, which makes you wonder what JP Morgan Chase has to hide. When I first started making inquiries of the bank, I found Fusco to be a courteous gentleman who, amid having his hands tied by his bank, tried his best to get me answers and I praised him on the air. Once his superior Kelly got involved, however, the information shut down, which just goes to show that when you have practices that are questionable, even unjust, the best policy, JP Morgan Chase has concluded, is to say nothing.
In the final analysis, the name Wall Street is quite apt since arguing with it is the equivalent of banging your head against a wall. If we Americans do not find our collective voice, Wall Street will run roughshod over our interests. We may be the little guys but together we are a giant force. I was against all the bailouts. But one thing's for sure. If the government decided to use taxpayer money to bail out the banks, then it shouldn't be used just for a banker's bigger mansion in the Hamptons but first and foremost on keeping more Americans in their homes.
Rabbi Shmuley Boteach, the international best-selling author of 23 books, is the host of 'The Shmuley Show' on WABC, 770AM, in NYC. He is also host of the national TV show 'Shalom in the Home,' on Planet Green, and founder of This World: The Values Network. His website is www.shmuley.com.