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Editorial

January 22, 2015

Today I was struck with the lack of consistency in enforcement of white collar crime.

March 24, 2011

The Federal Reserve denied the request by Bank of America to increase their dividend. B of A proposed to pay common shareholders seven cents per share per quarter.

Shareholders generally like dividends. My dad went to Wharton and he often took time, when he wasn't fixing his cars, to talk about investing. He liked dividends. He felt that you could place some trust in a company that could pay a dividend. In fact, one of the first things I

September 29, 2010

Tomorrow is the annual shareholders' meeting for H&R Block. I will be there, speaking out against the company's intentions to continue to offer RALs without the debt indicator.

Block is unique in the RAL space, because it has a line of credit with a bank partner that is large enough to satisfy any level of RAL funding that the company seeks to facilitate with its clients.

The Competition

Pacific Capital was forced to cease offering RALs at the end of last year, due to an order from their

March 16, 2010

Bank of America might have taken the lead on reducing fees on overdrafts, but that doesn't mean that they are without their issues.  The nation's largest bank is still gorging on fee income, and they are still paying most of their income out to their investors.

Bank of America canceled overdraft charges this week for some of the instances when a customer overdraws their account with their debit card.  This is not a small feat, particularly at a time when banks are struggling to remain solvent.

It would be another thing altogether to infer that Bank of America was going to wean itself off of fee income and return to the days of making money by making loans. In 2009, Bank of America recorded non-interest income of more than $62.5 billion. That is quite a lot - indeed, it represents an increase of more than 120 percent from 2008. Bank of America turned on the fee spigot. In 2008, fee income constituted only $28.4 billion. That was consistent with 2007, when fee income was $28.9 billion.  Fee income represents the ways that banks make money outside of charging interest. They make interest on loans.  This includes more than $8.4 billion in service charges on domestic deposits alone.

Rich people aren't paying those fees.  The bank actually gave money back to its venture capital customers, albeit only $2.5 million. The year before, venture capital customers paid $27 million in fees.  Elsewhere, the rich were still doing fine by Bank of America. BAC paid out $4.8 billion in dividends.  That amounted to 77.5 percent of all dividend income! Oh, wait, that's pretty much par for the course.  BAC has been paying out most of its income to its investors for years. Nothing changed in 2009.

A lot of people have been concerned about salaries at Bank of America. Funny thing - their lackluster performance in 2009 didn't seem to influence how well everyone was paid.  The average employee at Bank of America was paid $111,000 in 2009.  In 2008? "Just" $77,000.

Bank of America did decide to stop charging overdraft fees when consumers go into the red on their debit cards. It's an

February 3, 2010

OK, I am going to have to derivate from talking about banks to just weigh in with a brief editorial.

ACORN's Bertha Lewis sent out an email 12 minutes ago entitled "Sting the Stinger." You got the email if you are on one of their mailing lists.  I am on one of their mailing lists, because our organization is a member of a non-profit coalition that includes representatives from the North Carolina division of Acorn.  You could infer that I'm hardly someone with a predisposition against ACORN, or against the progressive causes that they have worked to support for years.

Lewis is out for blood, specifically the blood that would come from the scalp of James O'Keefe.  Young Mr. O'Keefe is in trouble, sitting in a Louisiana jail and perhaps destined for a federal prison.  Seems to me like the Stinger is going to be pretty well stung.

O'Keefe has been arrested on the grounds that he entered federal property for the purposes of committing a felony at Senator Mary Landrieu's office.

Lewis wants to use that moment to revisit the sting that O'Keefe put on Acorn last fall.  They are arguing that O'Keefe should be prosecuted for videotaping ACORN folks without their consent. Lewis writes:

"he videotaped ACORN folks without their consent...fight back against the corporate paymasters and their attack dogs seeking to disrupt this work by getting CA and MD to investigate James O'Keefe's allegedly illegal videotapes of ACORN employees."

Now, I work in policy, so it is hard for me to ignore how this kind of decision, if pursued, could create precedent to stifle investigative reporting. Let's imagine that it was "against the law to videotape ACORN folks without their consent" (Lewis quote)...Well let's imagine that the law didn't hold Acorn to a higher

October 27, 2009

There are pigs, and then there are capitalist pigs.  And among the capitalist pigs, Maurice "Hank" Greenberg can rut like none other.

[video

As much as C.V. Starr deserves genuine credit for founding and developing AIG, his close friend Hank Greenberg is often thought of as the man who built AIG.  Greenberg has been on the sidelines, at least by his own standards, since he was ousted from AIG in 2005 over violations of accounting rules.  Since then, he has been battling AIG in court.  He was able

September 11, 2009

Tomorrow is the North Carolina literary festival.  In the spirit of that festival, or perhaps because the weekend is approaching, or perhaps because someone needs to say it...I propose a literary reference to our current regulatory regime in the financial markets.

As you may or may not know, many feel that our financial regulatory system was asleep at the wheel during the last decade.  Subprime mortgage lending grew rampantly, and even though there was plenty of data to demonstrate that it would lead to problems, very

April 3, 2009

As much as advocates, policy researchers, regulators, and bankers are sensitive to the perceived issues surrounding the ongoing investment in AIG, it probably understates the  public's reaction to this issue.  Moreover, while their understanding is probably given nuance if they have an understanding of credit default swaps, t

March 26, 2009

The mortgage crisis dominates headlines these days.  It is the main focuses of these entries.  That said, there is another problematic trend that is somewhat related to poor lending decisions.

February 2, 2009

Cato Institute adjunct scholar Bert Ely has a comment on the editorial page of today's Wall Street Journal that indicates that the volume of commercial lending increased in the last quarter.   He says that the report is out of the

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