Service Employees International Union Says No to Bank of America Countrywide Deal
The nation’s fastest-growing union, the Service Employees International Union, calls the combination of the United States’ 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.
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.