It’s hard to pin down precise numbers, but anecdotal reports in news outlets across the country suggest that hundreds of thousands of Americans responded to “National Transfer Day” campaign by switching their deposits from major banks to credit unions.

But did those consumers accomplish what the campaign’s supporters wanted — to vote with their dollars for institutions with more concern and responsibility for their communities?

It’s always a good thing for consumers to hold financial institutions and other businesses accountable, but moving one’s money alone doesn’t lead to a just and equitable society. It may be comforting to view the world in black and white (e.g. big banks = bad, credit unions = good), but reality usually comes in shades of gray. In this case, large credit unions need to be held accountable every bit as much as banks.

Banks and credit unions both have a moral responsibility to serve low and moderate income communities. And there are many “low income credit unions” — designated as such by the National Credit Union Administration — that are doing amazing work, for which they deserve acknowledgement. But the awkward truth is that we don’t know nearly enough about the extent to which credit unions overall serve low- and moderate-income consumers. They aren’t required to collect and report details on the incomes or other characteristics of members, and because they aren’t covered by the Community Reinvestment Act, they do not have to report much of the information that is required from banks.

Congress made an effort to nudge credit unions in that direction with the 1998 Credit Union Membership Access Act. The law did successfully encourage credit unions to add offices in underserved areas, but it remains unclear to what degree, if any, this actually increased the number of disadvantaged people who became members.

Under CRA, banks have to report small business lending, small farm lending, and community development loans, investments, and services. That includes things like loans for affordable housing construction and lending to nonprofit organizations serving low- and moderate-income community development needs, community development financial institutions, community development corporations, and minority- and women-owned financial institutions.

Because of all this data, we have a reasonably good idea of what the banks are doing or not doing to promote development in underserved communities. We don’t know this about credit unions because they are exempt from CRA.

The limited data we do have on credit unions all predate the recent economic difficulties, but suggest areas of concern. A 2003 General Accounting Office study of large credit unions, for example, found lower-income Americans make up 36 percent of those who primarily use credit unions, while the figure for banks is 42 percent. Using Home Mortgage Disclosure Act data, the GAO also found that credit unions made a lower proportion of their mortgage loans to low- and moderate-income households than did banks — 27 percent vs. 34 percent.

The GAO recommended that the NCUA gather information from its members to determine whether credit unions are providing greater access to services in underserved areas, similar to what banks are required to report under CRA. But NCUA rejected the recommendation on the grounds that it would impose “substantial expanded record-keeping and reporting burdens on federally insured credit unions” and that such burdens were not “cost-justified.”

Indeed, credit unions have consistently resisted participating in CRA or anything like it. For example, National Association of Federal Credit Unions president Fred Becker wrote in a February 2010 letter to Massachusetts Rep. Barney Frank, then chair of the House Committee on Financial Services, that NAFCU, “does not support credit unions being subject to any type of Community Reinvestment Act (CRA) type requirements.” Credit unions, he added, “should not be shackled with regulatory requirements and arbitrary benchmarks that detract from the services that they provide to their members.”

There is a tendency to think of credit unions as small, local institutions, but many are quite large. According the most recent figures available, at least 10 credit unions have assets over $5 billion — sometimes way over $5 billion — a figure that might well have grown due to the “Move Your Money” campaign. It appears that none of the top 25 credit unions in California are designated as low income credit unions, meaning they have no explicit commitment to low-income communities.

None of this is to say that banks are saints or that the “Move Your Money” folks don’t have legitimate criticisms of the industry. And the positive contributions of low income credit unions are real. But all financial institutions should be accountable to the communities they serve, and that should include credit unions.

Why are top executives at government-backed mortgage giants Fannie Mae and Freddie Mac getting millions in bonuses while struggling homeowners get little or no help?

I’ve written before about the need for principal reduction to help homeowners fighting to keep their homes. Not only would this aid millions of Americans caught in difficult circumstances they didn’t create, it would shore up the weak housing market and boost the whole economy. I’m hardly alone: a large collection of financial experts and officials, including California Attorney General Kamala Harris and a large group of members of Congress have called for principal reduction.

Fannie and Freddie — bailed out by taxpayers to the tune of $169 billion — back a large percentage of those troubled mortgages and would need to sign off. But the federal agency that oversees them, the Federal Housing Finance Administration, has refused to go along.

This festering problem got renewed attention recently when the House Financial Services Committee approved a bill by a vote of 52 to 4 that would cap executive pay at Fannie and Freddie — a rare bit of bipartisan agreement on Capitol Hill.

How big are the paychecks going to top Fannie and Freddie executives? Big. Really, really big. Since the agencies went into conservatorship, Fannie and Freddie’s top six executives have received $35 million in compensation, including millions in bonuses, even as borrowers struggled to keep their homes and got no meaningful relief.

At the Financial Services Committee hearing, acting FHFA honcho Edward DeMarco stoutly defended both the seven-figure executive pay and his agency’s refusal to recognize financial reality and write down the principal of troubled loans to values that are realistic. Amazingly, he did this just days after Fannie and Freddie asked for another $7.8 billion from taxpayers to cover last quarter’s losses.

A message to Director Ed DeMarco: look out your window. This is exactly the sort of thing the Occupy Wall Street protesters are upset about, and they’re right. That’s why Kamala Harris recently called for DeMarco to “step aside” if he refuses to rethink his policies, saying, “It has become clear to me that the only way to keep distressed California homeowners in their homes is through meaningful principal reduction.”

What Harris said applies in every state where recession-battered homeowners, many of whom owe more than they will ever be able to sell their homes for, are trying to keep a roof over their heads. We know what needs to be done, and FHFA should lead, follow, or at least get out of the way.

And, if only for PR purposes, they might want to rethink those salaries and bonuses before the full Congress does it for them.

Goal Could Be Achieved Without Cutting Vital Programs; “No Deal Better Than a Bad Deal,” Greenlining Institute Says

WASHINGTON – Deadlock among members of the congressional “super committee,” indicated in several recent news reports, may actually be the best possible outcome, policy experts at The Greenlining Institute said today.

The committee, tasked with finding $1.2 trillion in deficit reductions over the next decade, has reportedly considered substantial cuts to Medicare, Medicaid and other vital programs but relatively little in the way of new tax revenues.

“No deficit deal is better than a bad deal, and a bad deal may be the only kind this committee can reach,” said Greenlining Institute Executive Director Orson Aguilar. “As we reported this summer in our study, ‘Corporate America Untaxed,’ nearly all of the deficit reduction goal can be achieved by closing down offshore corporate tax havens and making the richest companies pay their fair share. There is no need to devastate vital programs for the elderly and other vulnerable Americans.”

“Compromise” deficit proposals floated recently have generally been to the right of the Simpson-Bowles plan of last year, with minimal revenues and as much as $600 billion in cuts to Medicare and Medicaid

Greenlining wrote to the committee in August noting that simply closing offshore tax havens could reduce the deficit by as much as $1 trillion. Greenlining’s study found that by using offshore tax havens, major companies like Exxon and General Electric pay far less of their income in taxes than the average American, and in some cases no taxes at all.

“Because the dreaded ‘sequestration’ doesn’t kick in for another year, there’s time to get this right,” Aguilar said. “There is no justification for sacrificing our most vulnerable citizens while letting wealthy corporations evade as much as $100 billion in taxes every year.”

Current or former homeowners who were duped by lenders, and now may be just barely hanging onto their sky-high mortgages, should watch for a letter soon to help them recoup some of their losses incurred at the hands of big banks and loan servicers.

The latest crackdown by the Fed and the Office of Comptroller of the Currency is creating tighter oversight  of mortgage servicers that is set to stop at least some

the foreclosure hemorrhaging that has practically wiped out the greater portion of the average American’s wealth.

Under federal pressure, banks had been ordered to stop robo-signing–signing off on foreclosures without first reading the paperwork. Many people were foreclosed on by banks and servicers when they should have been modified instead.

Bruce Mirken at the Greenlining Institute said that the recent plan announced by the government to clean up “robo-signing” mortgage servicers and their victims is one good step forward.

“It’s important that those who are able to get advantage of it, do so,” he said. “It’s a good sign that they’ve started to take concrete action that will benefit some people who have been hurt by misbehavior by financial institutions.”

While the program is not expected to be an end-all solution, he said it is the best thing to happen in a while, and it will provide real help to some homeowners in trouble.

Both the Fed and the Office of the Comptroller give the plan teeth. Those two entities will monitor and review cases of the big banks and other servicers that approved quick signoffs, called “robo-signing” that drove hundreds of thousands into foreclosure.

Sub-prime loans bundled on Wall Street were sold for profit and the collapse of the real estate market rippled across the world, wiping out some 1.5 trillion in American wealth.

Banks and the financial institutions must comply under government watch, but at the same time, the moves aren’t expected to be enough to cover everyone.

“There’s a lot more that needs to be done and we’re going to keep yelling and screaming about it. But at least there’s glimmers of progress and that’s not to be completely discounted,” he said.

Greenlining Institute is a multi-ethnic advocacy and public policy organization, and has regular contact with regulators in Washington, and Sacramento.

Mr. Mirken thinks the organization has the ear of the financial institutions, and public pressure has also had a positive effect.

“They don’t operate in a complete vacuum. They are answerable to the public that are their patrons. It’s up to all of us to keep voicing what we need.”

Across California and the nation, communities of color have been devastated by the sub-prime loan debacle that got them into the homes with overpriced loans. Studies show that Blacks and Latinos were more likely than whites to receive sub-prime loans even when they qualified for prime loans.

Estimates are that over $300 billion of wealth has been wiped out in recent years under the force of sub-prime lending, and that Black and Latino homeowners took the disproportionate brunt in housing and wealth loss.

LaVerne Duncan, city of Long Beach Housing Communication Officer, said that they have partnered with Los Angeles Neighborhood Housing Services, the HUD-certified agency to conduct foreclosure workshops.

On November 16, Community Great Brethren Church will hold a workshop at 5885 Downey Avenue, and again on December 14 at Antioch Church of Long Beach located at 1535 Gundry Avenue. Both workshops are from 6:00 to 8:30 p.m.

She said that they continue to hold free monthly workshops in each council district in the city, and that everyone is welcome to attend and learn how to prevent foreclosure. She said that they have 12 workshops per year.

In the coming year, she said churches will become more involved through the Long Beach Ministerial Alliance in getting the word out to local residents worried about losing their homes.

“Our message is that housing help is here, and in their neighborhood,” she said. “They are able to sit down face to face with their lender and negotiate to save their home.”

“The thrust for us is that people know that help is there and that they can take advantage of this,” she said.

As public anger at Wall Street greed boils over in the form of protests spreading across the nation, the Federal Reserve Board is poised to allow creation of yet another “too big to fail” bank. Worse, that bank has a record of precisely the sort of predatory behavior that has Americans so upset.

The bank is Capital One, which wants to swallow ING Direct to become the nation’s fifth largest bank.
What’s so wrong with that? It’s hard to know where to start.

First of all, calling Capital One a bank is misleading. The company behind those ubiquitous “What’s in your wallet?” commercials is more like a credit card company masquerading as a bank.

Two thirds of Capital One’s 2010 revenue came from its credit card business, not consumer banking. Worse, one of Capital One’s specialties is subprime credit cards that are as predatory and dangerous as those tricky subprime mortgages that outfits like Countrywide were peddling a few years ago.

I was there on October 5, when the Federal Reserve came to San Francisco for the last of three public hearings on the merger and literally hundreds of community members turned out in the middle of their work day to object. That day, we heard multiple stories of how Capital One marketed its cards to low-income and immigrant communities, selling them as a way for people with no credit history to start establishing credit. But this enticing offer quickly turned into a nightmare as interest rates skyrocketed with even one late payment, fees piled up, and cardholders were driven further and further into debt.

One of Capital One’s most notorious reported tactics is to issue credit cards with very low limits, often in the neighborhood of $300. When that limit is exceeded, it typically would charge a fee while simultaneously issuing the cardholder a second or third card, also with a low limit. So instead of one credit card account with a reasonable credit limit, the unlucky cardholder now has three or more microaccounts — which pile up fees upon fees when the customer inevitably has trouble keeping track of them all.

Spanish-speaking customers reported having trouble getting assistance in Spanish, and when they finally reached someone who spoke their language, that person typically didn’t have authority to resolve the situation.

Capital One’s behavior regarding small business lending is just as problematic. Last year it slashed its Small Business Administration lending from $228 million to a laughable $551,000, apparently preferring to issue credit cards to small business customers.

But those cards are a much worse deal, with higher interest rates and fees than SBA loans, and don’t provide long-term capital, which is often a crucial need for these firms.

That’s not all. Capital One does have a significant mortgage portfolio, mainly from acquisitions of other banks, but hasn’t participated in the Home Affordable Mortgage Program, the national government-backed effort to stem the tide of foreclosures, except in the limited circumstances where it’s required. In my home state of California, where the company generates an estimated 10 percent of its profits, it hasn’t participated in the state’s foreclosure relief program, Keep Your Home California.

The Fed can allow this merger only if it finds that the systemic risk from the new bank’s size is outweighed by public benefit. But as hundreds of members of the public have testified in San Francisco, Chicago and Washington, D.C., there is little sign of any public benefit in Capital One’s business model.

This is truly The Bank Merger From Hell, and the Fed can and should block it unless Capital One agrees to tough, enforceable conditions that will change its outrageous behavior.

President Obama today will announce a new proposal to alleviate the pressure on homeowners who are under water, as he travels to Nevada, the ground zero of the housing bust.

From the front porch of a Las Vegas home — which has one the highest foreclosure rates in the country — the president will promote a plan to allow struggling homeowners who are backed by federal mortgages refinance without getting a new appraisal or a full credit check. The program also eliminates some risk-based fees for borrowers.

The changes are being spearheaded by the Federal Housing Finance Agency, which oversees government-sponsored Fannie Mae and Freddie Mac. The plan falls under the Home Affordable Refinance Program, which, the agency estimates, has helped already 894,000 families.

While administration officials say it will help thousands of homeowners, the program has its caveats. Only those homeowners whose mortgages are backed by Fannie Mae and Freddie Mac will be eligible for refinancing. Borrowers must have good credit and must have kept up with their mortgage payments, with no late payment in the past six months and no more than one late payment in the past 12 months. Additionally, the mortgage must have been sold to the agencies before May 31, 2009, and not been refinanced previously under the Home Affordable Refinance Program. The loan-to-value ratio has to be greater than 80 percent.

Proponents of the program say it would help boost the economy by relieving financial stress on homeowners and reducing their mortgage so that they would have more expendable money.

But economists disagree on the number of people who would actually benefit. Some say it wouldn’t affect more than a 1 million households, a relatively small number given that more than 6 million homeowners are facing foreclosure or have delinquent payments. Others say the restrictions are too stringent and automatically cut out those under-water homeowners who have bad credit.

“It’s certainly going to be a constructive step in terms of supporting the economy,” said Karen Dynan, vice president of the economic studies program at the Brookings Institution. But “the other important point is that it’s not a free lunch. Homeowners are going to save on their mortgage payments but there’s another side of that transaction. Investors and lenders, people who fund the mortgages, are going to suffer” by getting a lower return.

The changes come as the housing market, which is central to economic recovery, continues to struggle despite record-low interest rates and government programs to help homeowners.

Even though there is an oversupply of houses and interest rates are low, demand is low, given the high unemployment and general skittishness about the direction of the economy. Even those with buying power are facing a hard time obtaining loans because banks have tightened their restrictions after the mortgage meltdown.

In its Economic and Housing Forecasts for October 2011 report, Fannie Mae forecasted that home sales will remain “sluggish” and house sales will bounce near the bottom at least for another year. The large inventory of distressed homes continues to put downward pressure on prices, according to the report.

The Obama administration’s efforts to boost the market have been met with mixed results.

The program to give first-time homebuyers a credit met with enough success that it was renewed and even extended to existing homebuyers, under certain conditions. But critics of the plan say it artificially inflated the housing market and pulled those buyers into the market who would have brought in later months or years.

The biggest criticism has been leveled at the $75 billion Home Affordable Mortgage Insurance Program, launched in March 2009, which didn’t attract as many distressed homebuyers as the administration had hoped. In fact, many homeowners who took advantage of the program ended up defaulting again on their mortgage.

Some experts say the HAMP program was not aggressive enough in tackling the issue. Others say the administration, instead of cracking down on banks, did the opposite by paying them to change mortgages of struggling homeowners.

“The problems that need to be fixed have changed over time and the policy hasn’t kept pace with what the problems are,” Dynan said. “The other problem is that things turned out to be more complicated than people anticipated.”

Some housing experts say the administration’s programs need to level the playing field.

“It’s hard to know what would have happened had they not been there,” said Preeti Vissa, community reinvestment director at the Greenlining Institute, a public policy research and advocacy group. But the impact has “been almost negligible, particularly in hardest hit states or communities of color. Much more needs to be done.”

Although few 2012 candidates have discussed the issue, the housing market will play a significant role in the upcoming elections. If it continues to weaken, it will weigh on the economy and, in turn, consumer confidence.

Even the president admitted recently that too little has been done to tackle the issue and that his administration has provided too little support to distressed homeowners.

“The continuing decline in the housing market is something that hasn’t bottomed out as quickly as we expected,” Obama said at a Twitter town hall event in July. The administration’s programs are “not enough. And so we’re going back to the drawing board.”

He also said that no federal program could solve the housing crisis and that “some folks just bought more home than they could afford and probably they’re going to be better off renting.”

Foreclosure Crisis Continues to Decimate Middle Class While Administration, Congress Do Little, Greenlining Institute Says

WASHINGTON – While the Obama administration deserves credit for a number of actions that have helped low-income communities, today’s White House report on these issues, “Creating Pathways to Opportunity,” glosses over some critical failings, policy experts at The Greenlining Institute said today.

The report highlights some large programs, like the Affordable Care Act, and many smaller initiatives, including student financial aid and job training initiatives. It takes credit for keeping 4 million families in their homes.

“While many of these initiatives have been helpful to our communities, we’re disappointed that the White House chose to gloss over its weak efforts to stem the foreclosure crisis that continues to drive millions of hard-working Americans out of the middle class while weighing down the entire economy,” said Greenlining Institute Executive Director Orson Aguilar. “The scale of the solutions so far simply hasn’t matched the scale of the problem.”

Greenlining and other advocates have been calling for an aggressive foreclosure relief program centered around reducing the principal of troubled and under-water mortgages. This week, nearly all of California’s Democratic congressmembers wrote to the president advocating just such an effort.

“The path to the middle class – and to staying in the middle class for those struggling to hold on – simply won’t be there if foreclosures continue to run rampant, doors to homeownership are blocked, and financial reform is stalled because Congress won’t confirm a director for CFPB,” Aguilar said. “Neither the president nor Congress can afford to rest on their accomplishments thus far.”

As I wrote last time, a favorite right-wing talking point in recent years has been the claim that federal efforts to promote lending and investment in underserved communities, such as the Community Reinvestment Act, caused the subprime mortgage collapse and our ongoing recession. Not only is that nonsense, there’s a crucial bit of history that the Rush Limbaughs and Neil Cavutos of this world leave out:

For decades the federal government actively promoted redlining and racial segregation in housing. The CRA is, among many things, an attempt to balance the ugly results of policies that boosted white suburbs at the expense of urban neighborhoods populated by people of color.

This history is briefly recounted in Regaining the Dream, an important new book about how to successfully and responsibly promote homeownership for low and moderate income Americans, and how such programs differ profoundly from the reckless subprime lending that marked the housing bubble.

Back in the early 1900s, authors Roberto G. Quercia, Allison Freeman and Janneke Ratcliffe explain, “most urban African Americans lived in neighborhoods that were predominantly white.” But those setting federal housing policy believed that racially mixed neighborhoods had unstable property values. So when the Federal Housing Administration began promoting homeownership in the 1930s by backing home mortgages, it actually required racially restrictive covenants on the properties it insured.

The U.S. Supreme Court largely put an end to these restrictive covenants in 1948, but only slightly more subtle forms of racial discrimination in housing continued to be widespread for at least another generation.

It’s hard to believe now, but the FHA’s 1938 Underwriting Manual stated that “if a neighborhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes. A change in social or racial occupancy generally contributes to instability and a decline in values.”

Quercia, Freeman and Ratcliffe, all researchers at the University of North Carolina – Chapel Hill, lay out the results such policies produced in stark terms:

The creation of these policies and practices helped support the creation of economically healthy white suburbs and economically struggling, primarily minority, central cities. If dense, aging, and mixed developments were considered less valuable, central city areas by definition would be undervalued. If it was important to keep racial and social stability in neighborhoods, then as white middle-class people were the first occupants of new suburban developments, black Americans would find themselves excluded from these areas. … Between 1939 and 1954, FHA supported 60 percent of home purchases. Between the mid-1940s and mid-1950s, only 2 percent of these mortgages went to black Americans.

The effects of these policies linger today. For most Americans other than the very wealthy, their home is their single largest asset, the main repository of family wealth. The fact that whole groups of Americans were systematically kept from buying a home in neighborhoods where values were most likely to appreciate is a significant factor in today’s racial wealth gap. According to the Pew Center, for every dollar a white family owns, the median Latino family has six cents and the median black family has a nickel.

That staggering gap didn’t happen by chance. It was largely a result of deliberate policy choices.

As with many aspects of America’s troubled history around race, it’s tempting to try to forget all this — to pretend that it’s just history and no longer relevant. But sadly, the effects of our history of racial segregation live on, and efforts to fix the ongoing damage must continue.

As they look at the future of housing policy, the Obama administration and Congress must avoid policies that limit homeownership to the wealthy and thus continue to expand the gap between rich and poor. As Regaining the Dream shows, policies that promote sustainable homeownership for Americans of modest means are not only possible, they are good for our whole nation.

Consumer advocates Tuesday focused their criticism of the proposed Capital One Financial Corp. (COF: 38.80 +2.78%) acquisition of ING Direct USA (ING: 6.80 +5.43%) on what they described as Capital One’s predatory lending practices and inadequate commitment to reinvest in local communities.

Although the bank has pledged to invest $180 billion over 10 years in low- and moderate-income communities if its $9 billion deal to purchase ING Direct’s U.S. unit is approved, advocates say that’s not enough and that the Federal Reserve Board must block the merger.

“Capital One has not made their case that the increase in systemic risk is outweighed by a significant public benefit,” said Jesse Van Tol, director of communications for the National Community Reinvestment Coalition, in a conference call Tuesday with the California Reinvestment Coalition, the Greenlining Institute, and the U.S. Hispanic Chamber of Commerce.

John G. Finneran Jr., general counsel and corporate secretary for McLean, Va.-based Capital One, disputed that characterization in testimony at a Federal Reserve hearing in September.

“Neither Capital One nor ING Direct provides the types of critical financial services the disruption of which could pose significant risk to financial stability in the U.S.,” he said. A Capital One spokesperson did not immediately respond to a request for comment Tuesday.

The acquisition, which would make Capital One the nation’s fifth-largest lender by deposits, is the first the Federal Reserve is reviewing under new laws outlined in the Dodd-Frank Act that require regulators to consider a merger’s potential to create a too-big-to-fail financial institution.

In addition to raising concerns about the bank’s massive size should the merger go through, Van Tol pointed out that Capital One has announced it intends to wind down ING’s mortgage portfolio, now the seventh-largest in the country.

Community advocates described the acquisition as nothing more than a means for Capital One to extend the reach of its credit card business, which they say preys on minority and low-income consumers, miring them in a spiral of fees and rising interest rates that can wreck their credit and limit their access to other financial products, like home loans.

Capital One is “just a credit card company disguised as a bank,” said Preeti Vissa, director of the Greenlining Institute’s community reinvestment program.

The Fed will hold the third in a series of three public hearings on the merger Wednesday in San Francisco. The fact the hearings are even being held suggests the Fed is taking its duties very seriously and could impose conditions on the merger, said Alan Fisher, executive director of the California Reinvestment Coalition.

Van Tol pointed out that some of the community organizations protesting the merger were among the first to sound the alarm about the risky lending practices by Countrywide and other mortgage lenders that led to the housing crisis.

“It would be a mistake to dismiss these concerns without giving credence to what we’re saying here,” he said.

“What’s Preying On Your Wallet?”
Press Conference and Testimony at Fed Hearing in San Francisco Wednesday

SAN FRANCISCO –The Greenlining Institute, the California Reinvestment Coalition, and nearly 120 California community groups are urging the Federal Reserve Board to block the proposed merger of Capital One Bank and ING. The Fed will hold a hearing on the merger Wednesday at the Federal Reserve Bank of San Francisco, and advocates will hold a press conference inside the building at 10:30 a.m. Spanish language speakers will be available.

Click here to read Greenlining testimony for Capital One Hearing.

WHAT: Press conference and testimony at the Federal Reserve
WHEN: Wednesday, October 5. Hearing at 8:30 a.m., press conference at 10:30. Media should arrive at least 15 minutes early to go through security.
WHO: Orson Aguilar, The Greenlining Institute; Alan Fisher, California Reinvestment Coalition; Martha Montoya, business owner and board member, U.S. Hispanic Chamber of Commerce; Rosemary Shahan, CARS (Consumers for Auto Reliability & Safety); Clarence Williams, California Capital; Ed Gorman, National Community Reinvestment Coalition.
WHERE: Federal Reserve, 101 Market Street, San Francisco; press conference in the Fed Center on the first floor.
VISUALS: “Wanted” poster featuring Capital One CEO Richard D. Fairbank. To view the poster click here. For a high-resolution version, click here.

“Despite making more than 10 percent of its profits from California consumers, Capital One has refused to give back and invest in our communities,” said Alan Fisher, executive director of the California Reinvestment Coalition. “While they offer high-priced products to reap profits, the bank otherwise ignores low income communities, with almost no loans to minority- and women-owned businesses, no philanthropy, and no affordable housing investment in the state.”

“Capital One has a history of exploiting vulnerable communities,” said Greenlining Institute Executive Director Orson Aguilar. “They aggressively target low-income customers such as immigrants in the Central Valley with credit cards that have high interest rates and low credit limits. Then they charge late fees and raise interest rates, damaging their customers’ credit scores. Expansion of a company with this history of exploitation can’t be good for California.”

“Capital One is known for issuing small business credit cards instead of making traditional SBA loans, and that’s terrible for small business owners,” said Tunua Thrash, executive director of the West Angeles Community Development Corporation in Los Angeles. “In 2010, Capital One cut its SBA lending from $228 million to just $551,000. Compared to SBA loans, Capital One’s credit cards have higher interest rates and steep fees.”

“Around the country, individuals, small business and community organizations have testified in opposition to Capital One’s acquisition of ING Direct,” said John Taylor, president & CEO of the National Community Reinvestment Coalition. “This monoline credit card lender increases systemic risk through its credit card securitization practices, while creating no clearly significant public benefit. As it stands now, the Federal Reserve must block this acquisition under the provisions of Dodd-Frank.”

Capital One, a leading subprime and often predatory credit card company, would become the nation’s fifth largest bank if the merger is approved.