ReFund Our Communities!

EXPOSING PREDATORY PUBLIC DEBT TO GO ON OFFENSE AND REBUILD OUR COMMUNITIES

MAKEBANKS/CORPORATIONS

PAY!

Who’s Really In Control

Can’t Win If We Fight The Wrong Target

Can’t Win If We Hit The Right Target in The Wrong Place

Who Does Corporate Elite Want Us to Blame For Economic Crisis?

• Big government?• Overpaid union workers?• Social Security and Medicare?• What else????THE TRUTH???

Individual

Corporate

As Corporate Taxes Go Down, Government Borrowing Going Up!

(Outstanding municipal bonds in billions)

19801982

19841986

19881990

19921994

19961998

20002002

20042006

20082010

2012$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Workers Keep Production Going Up: Corporations Stagnate Wages

People Earning less, Borrowing More Consumer Debt Exploding Since 1970’s

(Total Consumer debt in $tr)

1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008$0.0

$500,000.0

$1,000,000.0

$1,500,000.0

$2,000,000.0

$2,500,000.0

$3,000,000.0

$8 trillion in Housing Debt

$1 trillion in Education Debt

$1 trillion in Credit Card Debt------------------------

$11 trillion in Household debt- Auto, Credit cards, student loans, mortgages, other revolving debt.

+$4 trillion Municipal Bond Debt

Wall Street’s Secret Plan21st Century Serfdom

Forcing People and Communities Into Debt and Dependency

Corporate Profits Have Skyrocketed Since Mid-70’s

(Corporate Profits in billions)

19291932

19351938

19411944

19471950

19531956

19591962

19651968

19711974

19771980

19831986

19891992

19951998

20012004

20070

300

600

900

1200

1500

1800

Total Corporate Profits

Wall Street Made a Killing Financial Sector Profits

(in billions)

19431946

19491952

19551958

19611964

19671970

19731976

19791982

19851988

19911994

19972000

20032006

20092012

$0

$100

$200

$300

$400

$500

Economic Reality Since the Mid 1970’s

• They Pay Less,• We Borrow

More,• They Get Rich,• We Get Poor!

Roaring ‘20s Unprecedented

Wealth Inequality

Militant Organizing Led

to New Deal

The Reagan Revolution

“Big Government, Big Labor is the

Problem”

The People vs

The Banksters

2013

?

The Great Recession had a racist impact

Wealth was lost across the board from the Great Recession, but significantly more so for people of color.

From 2005 to 2009, white median net worth fell 16% to $113,149.

But net worth fell by 66% for Latinos to $18,359, and 53% for Blacks to $12,124.

- Wasted Wealth: How the Wall Street Crash Continues to Stall Economic Recovery and Deepen Racial Inequity in America by the Home Defenders League, Alliance for a Just Society, and New Bottom Line

RATIO OF WHITE TO BLACK WEALTH1995. . . . . . . . . . . . 7-to-12004. . . . . . . . . . . 11-to-12009 . . . . . . . . . . . 19-to-1 RATIO OF WHITE TO LATINO WEALTH1995. . . . . . . . . . . . 7-to-12004. . . . . . . . . . . . 7-to-12009 . . . . . . . . . . . 15-to-1

Source: Pew Research Center, 2011

“Wells Fargo Mortgage had an emerging-markets unit that specifically targeted Black churches, because it figured church leaders had a lot of influence and could convince congregants to take out subprime loans.”BETH JACOBSON, FORMER WELLS FARGO LOAN OFFICER

- Wasted Wealth: How the Wall Street Crash Continues to Stall Economic Recovery and Deepen Racial Inequity in America by the Home Defenders League, Alliance for a Just Society, and New Bottom Line

Chase, Wells, BofA, Citi, Goldman Have Over $8.5 Trillion in Assets

Equal to 56% of US Economy

$2 Trillion Dollars in Corporate ReservesNot Including Financial Institutions

Walton Family Wealth equals Combined Wealth of Bottom 42% of the Population

147 Million People

Forbes 400 Wealthiest AmericansNet Worth $2 Trillion DollarsUp $300 Billion From 2012

Bankruptcy Acts of 1933 and 1934

Frazier-Lemke Farm Bankruptcy Act of 1934

Farm Mortgage Moratorium Act of 1935

Commodity Exchange Act of 1936

Chandler Act of 1938

Bank Holding Company Act of 1956 restrictions on interstate banking

State caps on credit card interest rates

S&L lending standards

Interest rate caps on S&L deposit accounts

SEC’s net capital ratio

Glass-Steagall Act of 1933

After Great Depression Bank Regulations Were Dramatically

Strengthened…

Big Banks Re-Take ControlBank Consolidation 1990 - 2010

Bankruptcy Acts of 1933 and 1934

Frazier-Lemke Farm Bankruptcy Act of 1934

Farm Mortgage Moratorium Act of 1935

Commodity Exchange Act of 1936

Chandler Act of 1938

Bank Holding Company Act of 1956 restrictions on interstate banking

State caps on credit card interest rates

S&L lending standards

Interest rate caps on S&L deposit accounts

SEC’s net capital ratio

Glass-Steagall Act of 1933

….And The Banks Got Those

Laws Rolled Back…

As Unit Pleads Guilty, R.B.S. Pays $612 Million Over Rate Rigging, 2/6/13

San Francisco Lawmaker Demands Inquiry in Bank Fraud Losses, 1/30/13

California Cities Sue Banks Over Libor Rates, Law Firm Says, 1/9/13

As Unit Pleads Guilty, UBS Pays $1.5 Billion Over Rate Rigging, 12/19/12

Libor arrests signal switch to individuals, 12/11/12

HSBC to Pay $1.92 Billion to Settle Charges of Money Laundering, 12/10/12

BofA, U.S, Bancorp Must Face Mortgage Trustee Lawsuit, 12/7/12

2 Banks to Settle Case for $417 Million, 11/16/12

Federal Prosecutors Sue Bank of America Over Mortgage Program, 10/24/12

A.C.L.U. Sues Morgan Stanley Over Mortgage Loans, 10/15/12

Annie Bell Adams, Foreclosure Victim, Sues Big Banks Over Libor Manipulation, 10/15/12

U.S. Sues Wells Fargo, Accusing It of Lying About Mortgages, 10/9/12

JPMorgan Unit Is Sued Over Mortgage Securities Pools, 10/1/12

Bank of America Reaches Settlement I Merrill Lynch Acquisition-Related Class Action Litigation, 9/28/12

Banks Face Suits as States Weigh Libor Losses, 9/4/12

Public Pension Funds Named to Lead ‘London Whale’ Lawsuit, 8/22/12

Bay Area toll agency accepts settlement, 8/22/13

Banks Balk at Request for Details on Litigation Costs, 8/4/12

UBS Execs Allegedly Deceived U.S. Cities, Steered Contracts To Friends, 7/30/12

Berkshire Bank Sues Barclays, Citigroup Over Libor, 7/30/12

Wells Fargo Will Settle Mortgage Bias Charges, 7/12/12

SEPTA union files suit against Bank of America, 6/28/12

Barclays Pays $450M to Settle Interest Rate Rigging Probe, 6/27/12

Citizens Bank Profited Off Customer Math Errors, Class Action Lawsuit Alleges, 5/9/12

SEC Accuses Wells of Ignoring Subpoenas in MBS Probe, 3/23/12

OCC Probing JPMorgan Chase Credit Card Collections, 3/12/12

New York Reaches $25M Settlement Over MERS Actions, 3/14/12

Settlement reached in veterans mortgage fraud suit, 3/12/12

Gregory Mackler, Whistleblower, Says Bank of America Defrauded HAMP, 3/7/12

US Conducting Criminal Libor Probe: Source, 2/29/12

Consumer watchdog launches overdraft inquiry, 2/22/12

States Negotiate $26 Billion Agreement for Homeowners, 2/8/12

Schneiderman sues BofA, JPMorgan, Wells Fargo and MERS for foreclosure fraud through MERS, 2/3/12

Big Banks Face Inquiry Over Home Insurance, 1/10/12

GE Will Pay $70.4 Million to Settle U.S. Probe Into Muni-Bond Bid Rigging, 12/23/11

BofA to pay $335m over discrimination claims, 12/21/11

Goldman faces lawsuits over $158 bln in mortgages, 11/9/11

Wells Fargo, Municipalities Settle Bid-Rigging Suit, 11/8/11

Court Hits Wells Over Mortgages, 11/3/11

Delaware AG Sues MERS, 10/27/11

FHFA Lawsuits: Price Tag Could Reach as High as $60 Billion, 9/7/11

Federal Reserve Board announces a formal enforcement action against the Goldman Sachs Group, Inc. and Goldman Sachs Bank USA, 9/1/11

BofA Sued By Homeowners To Block $8.5 Billion Mortgage Settlement, 8/30/11

AIG Files Suit Against BofA While Opposition to Settlement Continues, 8/8/11

Wells Fargo To Settle Class-Action Investor Lawsuit For $590 Million, 8/5/11

B of A Signs HUD Pact Over Mortgage Abuse, 8/4/11

Massachusetts Attorney General Launches Probe of MERS, 7/25/11

California may join probe of Wall Street's role in mortgage meltdown, 7/15/11

J.P. Morgan Settles Muni-Bid Case, 7/8/11

J.P. Morgan Chase to Pay $92 Million for Bid-Rigging Municipal Investment Contracts, 7/7/11

Wells Fargo Target Of Justice Department Probe; Agency Alleges Discriminatory Lending, 7/6/11

Register of Deeds John O’Brien Releases Forensic Study, Finds Mass Fraud in Foreclosure Docs, 6/30/11

J.P. Morgan to pay $153.6M in fraud case, 6/21/11

Bank Of America Faces New Probe; New York Attorney General Launches Investigation Into Mortgage Securitization, 6/13/11

Foreclosure Fraud Price Tag: $20 Billion, 6/6/11

Mortgage Companies Settle Suits on Military Foreclosures, 5/26/11

BofA to Pay $410 Million to Settle Overdraft Suit, 5/23/11

Goldman Braces for Federal Subpoenas, 5/20/11

Conspiracy of Banks Rigging States Came With Crash, 5/18/11

New York Investigates Banks’ Role in Financial Crisis, 5/17/11

Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers, 5/16/11

SEC Subpoenas JPMorgan Over Failed Mortgages, 5/6/11

Goldman, JPMorgan Among Banks Targeted in Swaps Probe, 4/29/11

Wells Fargo in settlement with SEC, 4/6/11

Wachovia Targeted Over Sale Of CDOs, 4/4/11

Five banks in Libor probe: source, 3/17/11

Big Banks Face Fines on Role of Servicers, 2/17/11

BofA's Countrywide Accused of ‘Massive’ Mortgage Fraud by TIAA, N.Y. Life, 1/25/11

Two States Sue Bank of America Over Mortgages, 12/17/10

Trustee Sues J.P. Morgan for $6 Billion, 12/3/10

But They’ve Still Been Breaking The Laws That

Remain

Wall St Looting Main St

Predatory Public FinanceUNETHICAL PRACTICES• Interest rate arbitrage• Exorbitant fees & interest rates• Discriminatory pricing• Prepayment penalties• Accelerated payment clauses• Misrepresentation of risk• Churning (unnecessary refis)• Requiring unnecessary add-ons• Negotiated bond sales

Illegal Practices• Bid-rigging• Interest rate manipulation• Securitization fraud

Examples of predatory deals• Interest rate swaps• Most credit enhancements• Capital appreciation bonds• Continuous refinancing bonds• Pension obligation bonds

Toxic Swaps Banks Gouging Taxpayers For Hundreds of Millions of Dollars

Swapping Detroit’s Future

• Detroit paid $547 million in penalties in FY 2012 to terminate swaps with several banks, including BofA, Chase, Morgan Stanley, and Goldman.

• The city had to take out new bonds to pay these penalties, and paid an additional $9 million in fees to banks like Chase and Morgan Stanley.

• BofA and UBS are now demanding that the city pay an additional $255 million in penalties to terminate the remaining swaps.

Federal Reserve pushed interest rates for Wall Street to near 0% to prop up the banks. Yet the Banks continue to charge Detroit 6% or more.

In addition to the TARP bailout, the Federal Reserve has an emergency program of at least $8 TRILLION.

The Federal Reserve has purchased around $1 TRILLION in mortgage-backed securities, and continues today to buy $40 billion per month. This amounts to a $40 billion per month transfer to Wall Street!

Interest Rate Swaps and Other Derivatives are a Taxpayer-subsidized

Windfall for the Banks

Toxic Swap Deals – The Tip of The Iceberg

Swaps

Capital

Appreciation Bonds

LIBOR Fraud Letters of

Credit

Dual Credit Rating

Bond Bid Rigging

Derivative Bid

Rigging

Securitization

Fraud

Fee Gouging

The LIBOR Fraud Scandal

Why Should We Care About LIBOR

• Cities, Counties, Pension Funds, School Districts, States, Transit Districts, Utility Districts, Universities …… basically all taxpayer funded public entities

Have Huge Investments Linked to LIBOR

• As a result of big banks manipulating LIBOR nearly every public entity was illegally cheated out of revenue.

LIBOR Scandal Illegal Rate Manipulation

• 16 Banks Illegally manipulated LIBOR Rates to Enrich Themselves by Reducing What They Had To Pay Our Communities

LIBOR Fraud Cost Detroit Millions

• The City of Detroit and its pension funds had billions of dollars invested instruments that may have been tied to LIBOR.

• Ten of the city’s toxic swaps were also tied to LIBOR.

• The city may have lost as much as $34 million as a result of LIBOR fraud.

Criminal Conduct of Banks & Rating Agencies

• The Banks engaged in fraudulent and illegal activities when they made predatory loans to Detroiters, often misrepresenting and lying about the loans that they underwrote.

• The ratings agencies, which are tools of the Banks, lied about the quality of mortgage-backed securities.

• Ratings agencies manipulate bond ratings, generating huge profits for the Banks

• The Banks engaged in a criminal conspiracy by manipulating the LIBOR rate.

• The Banks misrepresented (lied) the interest-rate swaps to Detroit and other public entities.

Banks refuse to pay property taxes

In 2012, almost half of unpaid property taxes ($57 million) was owed by the banks.

This does not include “zombie foreclosures”, where the bank evicts the homeowner, but fails to take control of the title.

The banks have engaged in criminal conduct. They must be held accountable for the destruction of our neighborhoods and the City.

Public Act 436 provides for this:

141.1556 Criminal conduct contributing to receivership status. Sec. 16:

An emergency manager shall, on his or her own or upon the advice of the local inspector if a local inspector has been retained, make a determination as to whether possible criminal conduct contributed to the financial situation resulting in the local government's receivership status. If the emergency manager determines that there is reason to believe that criminal conduct has occurred, the manager shall refer the matter to the attorney general and the local prosecuting attorney for investigation.

Prosecute the Banks!

Demand a Moratorium on Debt Payments

While the banks and rating agencies are investigated for their criminal conduct and while the economic crisis for poor and working people continues – STOP PAYING THE BANKS

Ultimately, the municipal debt must be cancelled because the banks and ratings agencies engaged in misrepresentation or fraud in the sale of the bonds and other debt instruments.

Demand Billions in Reparations or Restitution from the Banks

The Banks owe us tens of billions of dollars in damages due to their illegal activities. Look around the great City of Detroit at the devastation that the Banks have caused.

The poor and working people of Detroit have been hit by Hurricane Wall Street. We demand restitution!

Government

The PublicParents, Students,

Seniors, Public Health Recipients, Commuters,

Public Assistance Recipients

Public Sector WorkersTeachers, City/County

Workers, Transit Workers, Health Care

Workers, Etc

VS

What the Corporate Elite Wants Us To Believe

Wall Street, Big Corporations and the .01%

Government

Public Workers

Teachers, City/County Workers, Transit Workers,

Health Care Workers, Fire Fighters, Police Officers etc

The Public

Parents, Students, Seniors, Public Health Recipients,

Commuters, Public Assistance Recipients

The Reality

United With

Who Is Going to Pay?

Or

The Banksters & the Corporate Elite

Students, Seniors, Workers and The Disabled

The Current Debate:

Cut Workers or Cut Services to People?

The Debate We Need …

Making The Plan To Go On OffenseInside Actions

Steps we can take to move this with our public agencies

?Outside Actions

Public actions that bring the fight to our targets.

?