Nation's fastest-growing union calls combination of US' largest
mortgage lender with largest bank when both institutions are facing
mounting losses and potentially destabilizing risks bad for consumers, bad
for business, and bad for America
WASHINGTON, Jan. 11 /PRNewswire-USNewswire/ -- The Service Employees
International Union (SEIU) --- the fastest-growing union in North America
--- today cautioned against uncritical and short-sighted support for Bank
of America's attempt to acquire troubled mortgage giant Countrywide
Financial Corporation. In a statement issued today, SEIU said:
"With the deepening housing crisis and growing concerns about the
unknown risks lurking on and off Bank of America's balance sheet, we
believe combining the largest bank with the largest mortgage lender will
result in unnecessary and unacceptable long-term risk to the nation's
working families and consumers. Permitting such concentration of risk would
be like putting a sick patient, Bank of America, together in the same room
with a highly contagious and terminally-ill patient, Countrywide, and
expecting both of them to get better.
"While investors and regulators are eager to see Countrywide avoid
bankruptcy, it is more critical than ever that lawmakers take measures to
curb the growth of the nation's biggest banks. Huge banks and mortgage
lenders have long leveraged their market dominance to rake in huge profits
regardless of the risks to consumers and the economy and any bailout of
Countrywide -- the largest culprit in creating the subprime crisis -- would
be misguided.
"Rather than uncritically cheering Bank of America as a potential
savior in the short-term, lawmakers and regulators must look to the
potential long-term harm to working families and consumers and the risks to
the economy of a Bank of America-Countrywide combination. In addition to
being the largest bank in terms of branches and deposits, Bank of America
already holds a dominant position in credit cards and other areas and has
been growing its own mortgage lending business. Further consolidation of
the nation's banking industry would inevitably result in concentrated
economic risks.
"We believe lawmakers must aggressively enforce the 10 percent cap on
bank deposits and set standards for the independent and transparent
calculation of bank deposits and compliance. Bank of America should not be
permitted to use a 'thrift institution' loophole to sidestep the spirit --
if not the letter -- of the 10 percent cap.
"The trade-off for working families and consumers could not be clearer.
While a Bank of America bailout of Countrywide could help some mortgage
holders today, the long-run harm in terms of reduced competition, higher
fees, and even more hidden influence in legislative and regulatory circles
is just too high a price to pay for the nation's working families."
ABOUT SEIU
With 1.9 million members, the Service Employees International Union
(SEIU) is the fastest-growing labor union in North America. Together with
consumer advocacy organizations and elected and community leaders around
the country, we're leading efforts to hold the nation's largest banks
accountable to working families and our communities.
SOURCE Service Employees International Union, Washington, D.C.
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Related links:
http://www.bigbadbanks.org
CONTACT:
Lynda Tran of SEIU, +1-202-907-1172,
Lynda.Tran@seiu.org
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