MoveOn.org, a liberal political advocacy group, is leading a coalition of civil rights organizations and progressive political entities in condemning the proposed foreclosure settlement agreement between the nation's five largest banks and federal and state government agencies.
In an open letter to the White House entitled ‘Americans Deserve A Square Mortgage Settlement, Mr. President,’ MoveOn.org bemoaned that ‘while banks enjoy record profits, millions of Americans are drowning in underwater mortgages.’ Insisting that the banks ‘deserve much more than a slap on the wrist,’ the political groups demanded that the Obama administration take a more muscular approach to any proposed settlement.
‘The banks must pay a minimum $300 billion in principal reduction for homeowners with underwater mortgages and restitution for foreclosed-on families,’ the letter said. ‘The $300 billion shouldn't be taken out of the pension accounts of ordinary Americans. Authentic principal reduction at this scale is essential. Every effort to date to reboot the housing market has failed because it has not done the most essential thing – actually reduce the massive debt load carried by homeowners.’
MoveOn.org and the other groups also demanded that U.S. Attorney General Eric Holder get involved in launching a criminal investigation against the banks.
‘There must be a full-fledged, full-blown investigation into Wall Street financial fraud by the Department of Justice,’ they continued. ‘There should be a task force with the staff resources, the authority and the explicit mission of seriously investigating fraudulent behavior in the way home mortgages were originated, serviced and securitized.’
The letter added that the banks would not have any problems in providing a more generous payout than the $25 billion cited in the proposed settlement agreement.
‘The banks can afford it,’ the letter said. ‘U.S. banks made $35 billion in profits last summer alone and are currently sitting on a historically high level of cash reserves of $1.64 trillion. The six biggest banks – Bank of America, Wells Fargo, Citigroup, JP Morgan Chase, Goldman Sachs and Morgan Stanley – hold assets totaling $9.5 trillion. And that's not all. Despite their bleak performance this year, the nation's top six banks paid out $144 billion in bonuses and compensation for 2011, second only to the record $147 billion they paid out in 2007 at the height of the economic boom.’
The White House did not publicly acknowledge the letter. Joining MoveOn.org in the letter were Alliance for a Just Society, ColorofChange.org, National Domestic Workers Alliance, National People's Action, New Bottom Line, PICO National Network, Rebuild the Dream and Alliance of Californians for Community Empowerment.