The city of San Diego is anticipating $1.1 billion in general revenue funds this fiscal year. According to the city’s Office of the Comptroller, those revenues are deposited in Bank of America accounts. This is just one more sweetheart deal, with no strings attached, for a Wall Street bank that got bailed out while we got sold out.
Bank of America—Poster Child for Insatiable Corporate Greed
Bank of America took our $230 billion in federal subsidies (TARP+), paid no federal taxes in 2009 or 2010, and continues to pay out excessive bonuses and salaries while planning to lay off 30,000 workers.
And that is not the end of the greed. Bank of America offers military banking but does not let patriotism get in the way of profits. The Department of Justice has settled with them for illegally foreclosing on servicemembers. And of course there is the $5 debit usage fee which has generated such a public outcry that other banks are treating the fee like kryptonite.
But above all, Bank of America’s remains a veritable foreclosure mill. These are all more than sufficient reason for us as individuals to move our money to community banks or credit unions. Moving our money is certainly a strong, unequivocal message but it is not the only thing we can do on the local level to address the financial and social carnage caused by the banking industry.
If Bank of America wants to retain the city of San Diego as its customer, our conditions are debt forgiveness and accountability in return. We need to stop the San Diego death spiral in housing, which has trapped so many of our neighbors in underwater mortgages and has left 56,689 already foreclosed upon with many more still facing foreclosure.
Bank of America must agree to keep people in their homes by:
- Writing down the difference between the current market value of the home and the principal owed on the mortgage if the home is underwater
- Refinancing the loan with a reduced interest rate, so that the homeowner can afford the monthly payment
- Provide an annual report to the city of San Diego which includes the total number of mortgages they hold that are underwater, the number of write downs and refinance information.
If they are unwilling to comply with these three conditions, the city of San Diego must transfer our money to a community bank or local credit union.
Why should the city of San Diego make these demands?
Our poorest neighborhoods have been hit the hardest with foreclosures. These are also ethnically and racially diverse neighborhoods with the largest concentrations of African-Americans and Hispanics. Those of us who live in District 8, 4 and 3 have historically had difficulty getting mortgages and loans from commercial banks. Those same three districts now have the highest rate of foreclosures. Homeownership there constitutes virtually the sole source of household wealth and it has been wiped out with devastating results for both the homeowners and the communities. Councilmembers Alvarez, Young and Gloria should care deeply enough about this to lead the effort to keep people in their homes. The CPI report states that from 2008-2012, San Diego homeowners lost $19.2 billion in wealth, so this should not be a hard sell for other members of the council.
Debt relief is both a moral imperative and sound economic policy.
The cost to our local governments, in the form of lost property taxes since 2008 is calculated at $117.1 million by CPI. It is misleading to lay the blame for our budget problems solely on the city pension obligations when it is apparent that the revenue side of the budget is being starved, and in many respects, willfully so. Debt relief would permit people to stay in their homes and continue to pay property taxes. Keeping people in their homes eliminates the blight of abandoned and foreclosed properties, which also puts a strain on our city coffers and further lowers adjacent property values.
Mayor Sanders and San Diego City Council must respond to the clear message that our communities are being unnecessarily destroyed and that the destruction can and must be stopped. The bankers have already been forgiven. Now it is our turn.