That was more than a year and a half ago. Her mortgage has been sold three times since then, and each time, what progress she had made has been erased, forcing her to start negotiating from scratch. She had originally taken a subprime loan on the assurance that she could get a better deal later, but that assurance has simply vanished into thin air.
“When I first got my mortgage, the broker told me it may look risky now, but I could refinance a couple of years down the road,” she says. “I’m not an uneducated person, but when someone you trust in a business sense tells you one thing, you tend to believe it.”
Now Kennedy has added her voice to the growing crowd calling for bank accountability and transparency nationwide. In central Illinois, that crowd is known as Illinois People’s Action, and they’ve taken their voices to Chicago and Washington, D.C., as part of the larger National People’s Action group, protesting predatory lending and large bonuses for CEOs whose banks were bailed out with taxpayer money. IPA, formerly the Central Illinois Organizing Project, is a faith-based group advocating for a variety of causes like homelessness and job creation.
Rev. Tony Pierce, board president of IPA and co-senior pastor of Heaven’s View Christian Fellowship in Peoria, says bank accountability is important because “without it, the banks run wild and the structure crumbles.”
“I’m pro-business, but we have to have reasonable regulation,” Pierce says, adding that he’d like to see a reenactment of the 1933 Glass-Steagall Act, which separated commercial and investment banks, among other provisions. The act was repealed in 1999.
“Commercial banks that move into investment banking take on risky behavior like playing the stock market and gambling with funds,” Pierce said. “That puts basic lending at risk. Now, banks are playing the stock market instead of performing commercial lending. They’re making massive profits without helping the people who helped them (with taxpayer-funded bailouts).”
Pierce says he is encouraged by the recent fraud lawsuit filed by the U.S. Securities and Exchange Commission against Goldman Sachs. The SEC says a hedge fund company paid Goldman Sachs to push one of its investments, and although Goldman Sachs knew the hedge fund company expected its own product to fail and accordingly sold it short, Goldman Sachs continued to push the fund anyway without disclosing that fact to investors. The hedge fund company, Paulson and Company, one of the largest in the nation, was not charged in the suit.
When Goldman Sachs CEO Lloyd Blankfein told reporters in November 2009 that his company was “doing God’s work” on Wall Street, Pierce said he was filled with a mixture of “anger, disgust and extreme disappointment.”
“I got the feeling that they’re out of touch, not only with Main Street America, but out of touch with my understanding of God and his work,” Pierce says. “God and his work does not include pilfering from the American people.”
Contact Patrick Yeagle at firstname.lastname@example.org.