Chase Bank: Bringing Hypocrisy To A City Near You
September 17, 2009
By Terry Smiljanich:
“Let’s Start Banking Better, Tampa” says Chase Bank in its newest ad campaign. Your city probably has similar signs. “Let’s?” You mean Chase wants “us” to do a better job of banking? Give us a break, Chase. That takes a lot of nerve coming from you, of all banks!
You remember JP Morgan/Chase. It’s the mega-bank (second largest in the country) that took over Bear Stearns as a favor to the Treasury Department last year, and then received $25 billion in TARP taxpayer dollars to help it out of its crisis.
Then, as part of the “Making Home Affordable” program it was supposed to help homeowners renegotiate their troubled mortgages and keep them out of bankruptcy. Taxpayers helped Chase out, and it would help us out in return. Well, it didn’t exactly turn out that way.
Using Taxpayer Money for Chase’s Gain
What’s the first thing Chase did with its $25 billion largesse? Help homeowners? Become better bankers? Not quite. It turned around and used this taxpayer money to buy up new banks, so it could get even bigger. The taxpayers and homeowners could wait – Chase had greedy plans of its own.
When the “Making Home Affordable” program got started, Chase was one of the big banks that promised to go on a renegotiation spree with troubled homeowners, so that they could stay in their homes and avoid foreclosure. How’s that working out?
Not so good. Like other banks CWN has reported on, Chase customers trying to renegotiate their loans ran into the usual brush-offs – dropped calls, lost paperwork, etc. At latest report, only 20% of eligible Chase homeowners had successfully renegotiated their loans. Is that what Chase means by “banking better”?
When asked where responsibility lies for the mortgage mess, CEO Jamie Dimon offered this: “You’re supposed to meet your obligations, not run from them.” It’s all our fault, right?
Chase Avoids CEO Compensation Restrictions
Chase had a problem, though. Because of the TARP loan, the government took some preferred stock in Chase and so had a say in how Chase was run and how much it paid its top executives.
As a result, Chase CEO Dimon had to worry that his multi-million compensation package was at risk. After all, he brought home $27.8 million in compensation in 2007, and the top five executives at Chase made a grand total of $95 million that year.
So, Chase bought back the preferred stock from the government later this year. Now the top floor executives can vote themselves a nice compensation package without the government looking over their shoulders.
Meanwhile, Chase continues to shelter its money from US taxpayers by maintaining 158 (!!) subsidiaries in the Cayman Islands, a notorious tax shelter.
And as for its loyal long time credit card holders, Chase more than doubled the minimum monthly payback requirements on its cards.
“Let’s bank better?” No, Chase. You’ve got a lot of room for improvement before you go telling us to do a better job!