Everything you need to know about Tuesday's Arizona special election for Congress
Everything you need to know about Tuesday's Arizona special election for Congress
Ady Barkan, a progressive health-care activist whose videotaped pleadings with U.S. Sen. Jeff Flake, R-Arizona, last year briefly became a viral hit, has formed a group trying to raise money for...
Ady Barkan, a progressive health-care activist whose videotaped pleadings with U.S. Sen. Jeff Flake, R-Arizona, last year briefly became a viral hit, has formed a group trying to raise money for Democrats, starting with Tipirneni.
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Fed Officials to Meet With Activists Ahead of Jackson Hole Conference
Fed Officials to Meet With Activists Ahead of Jackson Hole Conference
When Federal Reserve officials gather for the Kansas City Fed’s high-profile policy conference in Jackson Hole, Wyo. this week, some of them will start with an unprecedented event.
On...
When Federal Reserve officials gather for the Kansas City Fed’s high-profile policy conference in Jackson Hole, Wyo. this week, some of them will start with an unprecedented event.
On Thursday, eight central bankers, among them Fed governor Lael Brainard and New York Fed President William Dudley, will meet with and answer questions from about 120 activists from the Campaign for Popular Democracy’s Fed Up Campaign, a left-leaning group working to change the way the powerful central bank works.
The meeting marks a turn for the invitation-only Jackson Hole symposium, which draws top central bankers and economists from around the world to discuss monetary policy issues behind closed doors. Though journalists cover the proceedings and Fed officials give press interviews on the sidelines, this is the first time the Kansas City Fed, which hosts the event, has organized a public forum for policy makers to meet with their critics beforehand.
“My sense is that we are starting to see real changes, ”said Ady Barkan, leader of the Fed Up campaign. He said he was prompted to launch the effort after realizing how little public attention was focused on the U.S. central bank, which directly affects the lives of U.S. workers, consumers, home buyers, business owners and investors.
Formally launched in 2014, the coalition of policy activists, labor and community groups has lobbied the Fed to keep interest rates very low to ensure the economic recovery benefits all Americans and not just the well off. The group has called for more diversity among the central bank’s predominantly white, male leadership; more openness about how regional Fed bank presidents are chosen and changes in the Fed’s century-old structure to reduce the influence of the banking industry.
Mr. Barkan, a 32-year-old lawyer, recalled wondering how to get the public to care about “the absurdly opaque issue” of Fed policy. He found more interest that he expected. Speaking with community groups, he found “everybody is fascinated, everybody gets the importance of it.”
The group has gained a notable amount of high-level access. Its members met in November 2014 with Fed Chairwoman Janet Yellen and several Fed governors, and later with Fed staff. Fed Up members have met with all 12 regional Fed bank presidents, even conducting public events with some, as it did with the Minneapolis Fed’s Neel Kashkari in early August.
The regional Fed bank leaders have largely welcomed their meetings with Fed Up. “I’ve been at the Fed 22 years. When you’ve been at an institution that long it is hard to know how other people view you” and how your policies play out in the real world, San Francisco Fed President John Williams told reporters in July.
“Understanding the perspectives of people outside of financial markets, outside of our own circles—that’s healthy,” Mr. Williams said. “Hearing what I think is supposed to be constructive criticism is healthy.”
Over the past year, Fed Up also has met regularly with lawmakers and their staff on Capitol Hill, held press briefings in front of the central bank’s Washington, D.C., offices and stacked congressional hearings with activists wearing their trademark green shirts.
Among the results: A large number of congressional Democrats and the campaign of Democratic presidential nominee Hillary Clinton have echoed Fed Up’s call for barring bankers from the boards that oversee the regional Fed banks and urged the central bank to focus more on promoting job growth. The Democratic legislators have recently expressed concerns over a lack of diversity among Fed leaders.
In congressional hearings in February, House and Senate Democrats peppered Ms. Yellen with more questions than in the past on issues such as inequality, stagnant wages and jobless rates for low-income Americans.
“For black Americans, we’re still in the midst of a very serious depression or recession,” Rep. Keith Ellison (D., Minn.), a member of the Congressional Black Caucus who had met with Fed Up, told Ms. Yellen in February.
When she returned to Capitol Hill in June, Ms. Yellen came armed with data and talking points addressing the diverging economic circumstances between white and black and Hispanic households.
“It’s important for us to be aware of those differences and to focus on them as we think about monetary policy and work that the Federal Reserve does in the area of community development,” she said.
That contrasted with Ms. Yellen’s previous comments that the Fed’s options for addressing the economic troubles of minority groups were limited. Some Fed watchers said her shift in tone suggests policy makers are paying closer attention to such concerns.
The gestures may not seem like much to outsiders, but to people familiar with the Fed—an institution that is slow to change and resistant to criticism—they are viewed as a significant shift.
“It’s kind of monumental to get the Fed to change,” said Sarah Binder, a senior fellow at the Brookings Institution, noting the creation last year of an advisory council at the Fed focused on the concerns of low-income communities.
That said, a number of the Fed bank presidents have argued against the structural reforms Fed Up is advocating. In May, Mr. Dudley said “the current arrangements are actually working quite well, both in terms of preserving the Federal Reserve’s independence with respect to the conduct of monetary policy and actually leading to pretty, you know, successful outcomes.”
Atlanta Fed President Dennis Lockhart expressed skepticism about the call for more openness about the selection of regional reserve bank chiefs.
“When it comes to picking new bank presidents, are you going to get that with a completely open process much like an election? I don’t think these are roles that should be filled by public election,” he said.
Fed Up’s funding comes primarily from the Open Philanthropy Project, which provides grants and funds to projects on justice reform, immigration and economics. Open Philanthropy committed $1 million toward Fed Up’s 2016 budget. In 2015 Open Philanthropy donated $750,000 toward Fed Up’s $1.1 million annual budget. Dustin Moskovitz, a Facebook co-founder who left that firm in 2008, is one of the primary sources of Open Philanthropy’s funds.
Some former central bankers worry Fed Up has unreasonable expectations in a world in which central bank policy can’t change economic fundamentals such as long-run growth in productivity, output or wages. They also fret it was the Fed itself, via its response to the financial crisis, that created the perception it has the tools to affect more than short-term fluctuations in inflation and hiring.
Charles Plosser, former president of the Philadelphia Fed, said the Fed officials, through word and deed, “continually raised expectations about what they can do.” And having made the public believe it was more powerful that it actually is, officials “are setting themselves up for exactly this sort of attack” by those who want more out of the Fed.
Former Dallas Fed leader Richard Fisher said he had long warned that ultra-aggressive Fed stimulus policies that he said primarily benefited the rich would end up “stoking the fires of populism.”
The Fed has faced populist critics before. What is different about Fed Up, Ms. Binder said, is it seems to be well-funded and well-organized and have a constructive agenda, as opposed to some groups who have called for abolishing the Fed or limiting its powers.
“They’re kind of working through the system in a way, which is to say, ‘Look, [Congress has told the Fed] to care equally about inflation and jobs—it’s not time to give up on jobs,’” she said.
Corrections & Amplifications:
Rep. Keith Ellison is a Democratic congressman from Minnesota. An earlier version of this article incorrectly said he is a Republican. (Aug. 25)
By Michael S. Derby and Kate Davidson
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“Let Our Wages Grow:” Fed Up Coalition to Attend Federal Reserve’s Jackson Hole Symposium, Ask Fed Not to Kill the Recovery
On August 27 and 28, workers, economists and allies with the Center for Popular Democracy’s Fed Up coalition will return to Jackson Hole, Wyo. with a clear demand for Federal Reserve officials:...
On August 27 and 28, workers, economists and allies with the Center for Popular Democracy’s Fed Up coalition will return to Jackson Hole, Wyo. with a clear demand for Federal Reserve officials: Let Our Wages Grow.
Some Fed officials claim the risk of inflation as a reason to raise interest rates, and central bankers have even made “Inflation Dynamics” the theme of their annual summit. But inflation is nowhere to be seen. A raise in interest rates would mean slowing the economy, halting the recovery and harming families for whom the recovery has been weakest: women and people of color, especially African Americans.
With too many Black workers still unemployed and wage growth nowhere to be found, the economy is simply not ready for the Fed to slow it down. Members of the Fed Up coalition will take this message to Jackson Hole, and will contrast the Fed’s summit on inflation with their own conference focused more broadly on jobs, wages and other issues of primary importance for working families.
The Fed Up campaign, anchored at the Center for Popular Democracy, will hold a number of teach-ins in Jackson Hole, Wyo. during the Federal Reserve’s symposium from August 27 to 29 to convey why it does not make sense to stop the recovery for American families. The teach-ins will be led by workers, economists, and Fed Up allies and will cover an array of topics like the Fed’s role in full employment, the intersection of Black Lives Matter and the Fed, the selection process for regional bank presidents, a historical look at inflation, and more.
“There is no data supporting the Fed’s push for higher interest rates,” said Ady Barkan, campaign director for Fed Up. “While they toy with halting the recovery, there is a crisis of stagnant wages and a lack of good jobs. We will remind Fed officials that their actions could have damaging consequences for women, African Americans and Latinos.”
The Fed Up campaign’s efforts to highlight the urgency of letting the economy grow for working families goes back to its inception last year. Since then, the Fed Up members from across the country have attended Jackson Hole, met with Federal Reserve Chair Janet Yellen and regional Fed presidents, held national mobilizations, and more.
“With Fed officials gearing up for a crucial decision-making period, it is more important than ever that they hear from workers and understand how their decisions play out in communities across the country,” said Connie Razza, Director of Strategic Research at the Center for Popular Democracy.
Details for the teach-ins will be released at a later date.
Interviews Available
There are interviews available with workers affiliated with the Fed Up campaign who are coming to Jackson Hole, as well as economists and policy experts from the Economic Policy Institute, the Center for Popular Democracy, and allies.
For inquiries or interviews, please write to press@populardemocracy.org.
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The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.
The Fed should rethink how its conducts monetary policy
The Fed should rethink how its conducts monetary policy
There is a growing sentiment that the Federal Reserve needs to change the principles by which it manages our economy. Federal Reserve officials are saying it. Community organizations, labor unions...
There is a growing sentiment that the Federal Reserve needs to change the principles by which it manages our economy. Federal Reserve officials are saying it. Community organizations, labor unions, and think tanksare saying it. And on Friday, 20 of the country's most prominent economists released a joint letter saying it.
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Ana María Archila: Low Wage Workers are Paving the Way to Democracy
GRITtv - February 18, 2014, by Laura Flanders - Bill de Blasio campaigned on ushering in a new era in New York City and actively pursued low-wage voters. Now that he is Mayor, what can the...
GRITtv - February 18, 2014, by Laura Flanders - Bill de Blasio campaigned on ushering in a new era in New York City and actively pursued low-wage voters. Now that he is Mayor, what can the people who elected him do to influence what happens next? It is a question grassroots groups grapple with around the country. On GRITtv this week, Ana María Archila shares a few ideas. Archila was a founder of one of the most effective community groups in New York; now she's heading up a regional initiative that seeks to build popular democracy, not only at the ballot box, but in between elections.
From the school to prison pipeline and stop and frisk to immigration reform and workplace safety regulations, New Yorkers are eager to seize the moment for political change, says Archila. For evidence, consider the crowds that gathered at the Talking Transition Tent which was set up in downtown, immediately following last fall's elections.
Mayor Bill de Blasio seems to be listening. Less than two months into his term he has expanded paid sick leave for hundreds of workers around the city, one of the central demands of low wage workers. But how do people ensure that this momentum continues?
"He is only listening because low wage workers are extremely organized," Co-Executive Director for the Center for Popular Democracy Ana María Archila tells GRITtv. "New Yorkers are demanding more."
In addition to paid sick leave, organizers with Make the Road New York (the community organization that Archila describes as her "organizing home") are campaigning for a raise in the minimum wage and increased work place safety regulations. Organizing locally and creating small scale initiatives, like worker or consumer co-ops, can help engage people and address some immediate needs, but ultimately, low wage Americans need to build political power.
"The biggest co-operative we have is our own government and we need to make sure that it works for us," she says.
For more on ushering in a new progressive era, watch our interview with Joo-Hyun Kang on ending the Stop and Frisk regime.
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Advocates Rally to Eliminate ‘Sub-Minimum Wage'
Brooklyn Daily Eagle - October 23, 2014, by Matthew Taub - Hundreds of tipped and low-wage workers and advocates, including fast food, car wash and other low-wage workers, rallied...
Brooklyn Daily Eagle - October 23, 2014, by Matthew Taub - Hundreds of tipped and low-wage workers and advocates, including fast food, car wash and other low-wage workers, rallied outside a Domino’s Pizza location in Harlem before marching to the second public hearing of Gov. Andrew Cuomo’s Wage Board, where they testified and called on the Wage Board to eliminate the sub-minimum wage for the 229,000 tipped workers in New York state.
“In an increasingly unaffordable city, tipped workers remain among the lowest-paid hourly workers,” said New York City Public Advocate Letitia James, who joined the workers at the rally and wage board hearing. “An hourly wage of $5 an hour is simply not sustainable for an individual or a family. Now is the time to ensure that low-wage workers receive a fair and sustainable income. I join the many voices today calling on Gov. Cuomo to help bring fair wages to these industries.”
Employers in New York are allowed to pay less than the minimum wage — just $5 an hour — to restaurant servers, delivery workers and other service workers. Employers are legally required to “top off” a tipped worker’s pay when it falls short of the regular minimum wage, but lax enforcement enables employers to routinely violate minimum wage, overtime and other wage and hour laws with minimal repercussion.
“We work very hard and deserve a raise, just like other minimum wage workers in this state,” said Juana Tenesaca, a tipped worker and member of Make the Road New York. “I have worked as a waitress for years, earning the tipped minimum wage, and it’s impossible to raise my children never knowing how much money I’ll bring home at the end of the day. My daughter had to get a job while she was still in high school to help support our family and that breaks my heart.”
A July report by the National Employment Law Project finds that eliminating the sub-minimum wage would benefit an estimated 229,000 tipped workers in New York.
“Tipped workers are employed in industries like hospitality that are among the fastest growing in today’s economy,” said Tsedeye Gebreselassie, senior staff attorney at the National Employment Law Project. “If we want to stimulate consumer spending and boost our local economies, we need to make sure that the growing number of New Yorkers relying on these jobs actually have money to spend on basic necessities at their neighborhood stores.”
“Having to live entirely off tips means the customer is always right, which means I’ve had to put up with unwanted advances and uncomfortable situations from guests,” said Ashley Ogogor, a tipped worker and member of Restaurant Opportunities Center-United. “The guest shouldn’t have to feel pressured at the end of the night to pay me a decent wage. If seven other states can require restaurant owners to pay their employees a full minimum wage, so can New York.”
As part of last year’s legislative deal to increase New York’s minimum wage to $9 an hour by Dec. 31, 2015, the sub-minimum wage for tipped workers was set to automatically rise in proportion to the full minimum wage whenever the latter is raised with one exception: workers in the hospitality industry. The final deal froze these workers’ wages at $5 an hour and instructed Gov. Cuomo’s Department of Labor to convene a “wage board” to determine whether these workers will get a raise, and if so, by how much.
“We call on Gov. Cuomo and the wage board to do whatever it takes to lift up working families in the Empire State,” said Tony Perlstein, campaigns co-director for the Center for Popular Democracy. “Wealthy restaurant employers shouldn’t receive special treatment that allows them to pay poverty wages to working New Yorkers, including the women who make up more than two-thirds of the tipped wage workforce. Seven states have already eliminated their sub-minimum wages, and more are seriously considering it. Their restaurant sectors are not suffering for it, and in fact are thriving.”
The wage board, consisting of Timothy Grippen, Retired Broome county executive; Heather C. Briccetti, president and CEO of the Business Council; and Peter Ward, president of the New York Hotel Trade Council, heard hours of testimony detailing how New York’s tipped subminimum wage fuels unstable paychecks and poverty for thousands of workers, particularly women, across the state.
“People want to work hard at a place where they feel valued,” said Amado Rosa, a tipped worker at a Thai restaurant and a member of Make the Road New York. “Being paid $4 or $5 an hour does not make a worker feel validated and does not generate enough income to support a single person or a family. I have faced many hardships over the years, and my anxiety stemmed from not knowing what my take-home pay would be in a given week.”
The poverty rate among New York’s tipped workers is more than double that of the regular workforce. Seven states across the country have adopted policies requiring employers to pay tipped workers the full minimum wage and have shown that eliminating the sub-minimum wage reduces poverty without slowing job growth. In fact, according to projections by the National Restaurant Association in their 2014 Industry Forecast, all of the states that require employers to directly pay the full minimum wage to tipped workers are expected to have greater restaurant job growth than New York in the next decade — in most cases, much greater. Tipped workers are already being paid $9 or more in California, Washington and Oregon, and will soon be getting raises to over $9 in Minnesota, Hawaii and Alaska.
“More than 3 million New Yorkers work low-wage jobs, and they need our state government officials on their side,” said Michael Kink of the Strong Economy for All Coalition. “New York needs a one-two punch for good jobs: a big increase in the minimum wage, and elimination of the second-class sub-minimum wage for tipped workers. This combination could boost the paychecks of millions of workers and help revive the New York economy from the ground up — the Wage Board should take direct action to provide one fair wage to a quarter-million tipped workers to get us moving now.”
Advocates who testified at today’s hearing are members of Raise Up NY, fighting for #1FairWage, a coalition comprised of tipped workers, the National Employment Law Project, Make the Road New York, the Center for Popular Democracy, Fast Food Forward, New York Labor-Religion Coalition, New York Communities for Change, ROC-NY, ROC-NY affiliate of Restaurant Opportunities Centers (ROC) United, Strong for All, United New York, Citizen Action New York, Tompkins County Workers Center, Worker Center of Central New York, Metro Justice, Coalition for Economic Justice, Alliance of Communities Transforming Syracuse (ACTS) and other community groups and advocates around New York State calling for the elimination of New York’s sub-minimum wage for tipped workers.
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Austin becomes first city in the South to mandate paid sick leave
Austin becomes first city in the South to mandate paid sick leave
But Austin’s paid sick leave vote has implications for many other areas. Sarah Johnson, the co-executive director of Local Progress, an organization that has worked to help Austin’s paid sick...
But Austin’s paid sick leave vote has implications for many other areas. Sarah Johnson, the co-executive director of Local Progress, an organization that has worked to help Austin’s paid sick leave efforts advance, told ThinkProgress that the wider region stands to benefit from the city’s example.
Read the full article here.
The Fed's lack of diversity is hurting its judgment
The Fed's lack of diversity is hurting its judgment
Federal Reserve Chair Janet Yellen found herself in the hot seat at the recent bi-annual Humphrey Hawkins testimony as members of Congress challenged her over the lack of diversity among the Fed's...
Federal Reserve Chair Janet Yellen found herself in the hot seat at the recent bi-annual Humphrey Hawkins testimony as members of Congress challenged her over the lack of diversity among the Fed's ranks.
Asked by Senator Elizabeth Warren whether she was concerned that 10 of the 12 Fed's regional presidents are men, Yellen answered that she did believe it was "important to have a diverse group of policymakers who can bring different perspectives to bear."
The nation's central bank has recently come under intense scrutiny for appointing predominantly white men from the banking and corporate sectors to leadership positions. Last month, 127 members of Congress sent a widely publicized letter to Yellen calling for her to commit to leadership that better reflects the diversity of the United States.
For the last two years, the Fed Up coalition – comprised of community organizations and labor groups in each of the 12 Federal Reserve districts – has sat down with Yellen and other Fed policymakers to ask that more diverse candidates are considered for directorships at the Federal Reserve Banks, and that the process for selecting Federal Reserve Bank presidents be opened up to greater transparency and public input.
The call for a Fed membership that reflects America's diversity was enshrined in a law passed by Congress 40 years ago, an important thing to keep in mind when considering the modest recent progress touted by Yellen. The law requires the Federal Reserve to "represent the public, without discrimination on the basis of race, creed, color, sex, or national origin, and with due but not exclusive consideration to the interests of agriculture, commerce, industry, services, labor and consumers."
While we are encouraged that Yellen became the first woman ever to hold the position of Fed Chair in 2014, the reality of the Federal Reserve is far from representative of the public. Currently, 11 of the 12 regional Reserve Bank presidents are white and 10 of the 12 are men. Not a single Reserve Bank president is Black or Latino, which means there is no representation from the communities hardest hit by the 2008 financial crisis. In fact, there has never been an African American president of a Reserve Bank in the history of the Federal Reserve System.
Moreover, all voting members of the Fed's powerful interest rate-setting Federal Open Market Committee (FOMC) are white.
This is a problem. The power for ensuring the country reaches full employment rests solely with people who do not share the lived experiences of those most affected by their policies. The voices of women, African-Americans, Latinos, and representatives of consumers and labor are being shut out of key discussions over our economic future.
The impact of the economic crisis was not experienced uniformly across different communities, with the vaunted recovery never reaching some segments. The unemployment rate for African-Americans currently stands at 9 percent, more than double the unemployment rate for white Americans of 4.3 percent. The Latino unemployment rate of 5.6 percent is also worse than what it is for white Americans.
In a marked shift from her stance a year ago, Yellen noted racial disparities in economic outcomes in her opening remarks to Congress and stressed the importance of monitoring "different groups in the labor market to see if what we perceived as broad-based labor market improvement is being widely shared."
"Elizabeth Warren told Janet Yellen that the current process for appointing regional bank presidents 'is broken.'"
Compare this with her testimony last year, when Yellen dismissed the impact full employment can have on reducing racial disparities in unemployment and wages, claiming the Fed's tools were limited.
Yellen separately acknowledged racial disparities and the need for greater diversity among Fed leadership, but stopped short of linking the two. We believe the two are inextricably linked – a Fed filled with white male bankers will never be able to fully relate to impoverished communities of color.
That is why we have offered Yellen a slate of 39 candidates from which she can appoint directors to sit on the boards of the regional Banks. Drawn from all 12 Fed regions, the candidates are racially diverse, gender balanced and come from a range of backgrounds in labor, academia, and community-based organizations.
Elizabeth Warren told Janet Yellen that the current process for appointing regional Bank presidents "is broken." Yellen can demonstrate her commitment to diversity by appointing any of these 39 candidates to open board director positions.
Warren and other members of Congress in both houses are standing with low-wage workers to shine a light on our nation's opaque but vitally important economic policymaking institution. It's time for the Fed to heed the call on behalf of the millions of Americans around the country who are still suffering from the devastating impact of the 2008 crisis. It's time for the Fed to truly represent the public.
By Dushaw Hockett
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No Factions in Foxholes
No Factions in Foxholes
By focusing chiefly on the surge in middle-class activism, says Andrew Friedman of the Center for Popular Democracy, the news media are overlooking a similar surge “in many of these front-line...
By focusing chiefly on the surge in middle-class activism, says Andrew Friedman of the Center for Popular Democracy, the news media are overlooking a similar surge “in many of these front-line communities, brown and black communities, working-class communities.”
Read full article here.
Wells Fargo: California Leader in Predatory Lending and Heartless Foreclosures
San Diego Free Press - March 13, 2012, by Alliance of Californians for Community Empowerment - When it comes to foreclosing on Californians, it looks like Wells Fargo may take the prize. According...
San Diego Free Press - March 13, 2012, by Alliance of Californians for Community Empowerment - When it comes to foreclosing on Californians, it looks like Wells Fargo may take the prize. According to a report released today, Wells Fargo is responsible for more homes in the foreclosure pipeline in California than any other single lender.
Wells Fargo is servicing the most loans, but they are providing less principal reduction to struggling borrowers than either Bank of America and Chase – who themselves should be doing more! The recent report from the Monitor of the multi-state Attorneys General settlement with the five big mortgage servicers showed that Wells Fargo trails behind Bank of America and Chase when it comes to the amount of principal reduction given as part of first lien loan modifications.
This is the very same Wells Fargo that just had its most profitable year ever in 2012, with earnings of $19 billion.
The report, California in Crisis: How Wells Fargo’s Foreclosure Pipeline Is Damaging Local Communities, by ACCE (Alliance of Californians for Community Empowerment), the Center for Popular Democracy and the Home Defenders League, shows the harm coming to homeowners, communities and the economy unless Wells Fargo reverses its course and averts some or all of the impending foreclosures.
Click here to download the report.
The report uses data from Foreclosure Radar to look at loans currently in the foreclosure pipeline in California – meaning loans that have a Notice of Default or Notice of Trustee Sale. Of the 65,466 loans in the foreclosure pipeline, close to 20% of them are serviced by Wells Fargo.
If Wells Fargo’s 11,616 distressed loans go through foreclosure, California will take a next $3.3 billion hit: Each home will lose approximately 22 percent of its value, for a total loss of approximately $1.07 billion; homes in the surrounding neighborhood will lose value as well, for an additional loss of about $2.2 billion; and government tax revenues will be cut by $20 million, as a result of the depreciation.
And not surprisingly, African American and Latino communities will be particularly hard-hit. The report includes maps for seven major cities showing minority density and dots for each of Wells Fargo’s distressed loans. In city after city, they are heavily clustered in neighborhoods with high African American and Latino populations.
“My community has been absolutely devastated by the foreclosure crisis, and I put a lot of the blame at the doorstep of Wells Fargo,” says ACCE Home Defenders League member Vivian Richardson. “Wells Fargo’s heartless and unfair foreclosure practices are sending far more homes into foreclosure than is necessary.”
San Francisco Supervisor David Campos released a statement of support: “Our communities and our entire State are still reeling from the housing crisis, and will be for years to come. As this report shows, the numbers of homes still facing foreclosure is enormous. Principal reduction is clearly a critical strategy for saving homes and stabilizing the economy. Wells Fargo and the other major banks should be doing more of it.”
The report recommends:
Wells Fargo should commit to a broad principal reduction program.This means that every homeowner facing hardship should be offered a loan modification, when Wells has the legal authority to do so. The modification should be based on an affordable debt-to-income ratio, achieved through a waterfall that prioritizes principal reduction and interest rate reductions. Junior liens must also be modified.
Wells Fargo should report data on its principal reduction, short sales, and foreclosures by race, income, and zip code.Wells Fargo must be more transparent about its mortgage practices. The bank has an egregious history of harming California’s African American and Latino communities through predatory and discriminatory lending. To show the public that it has reformed, Wells Fargo must make this data available. The people of California need to know that Well Fargo is no longer discriminating against people of color and is fairly and equitably providing relief to homeowners and to the hardest hit communities.
Wells Fargo should immediately stop all foreclosures until the first two demands are met.In the event that it takes a few months to set up a fully functioning principal reduction program, Wells Fargo needs to immediately stop all foreclosures. Wells Fargo has done enough harm. It’s time to stop. California deserves a break.
ACCE is waging a campaign to push Wells Fargo to be a leader in California, their home state, in saving homes – beginning with their performance to comply with the Attorneys General Settlement and with the Homeowner Bill of Rights, but not ending there.
Click here to sign on to a letter to Wells Fargo CEO John Stumpf to support to campaign demands.
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