Matt Taibbi wrote a really interesting article last week, Wells Fargo’s Master Spin Job. It’s about this program that Wells Fargo has started, HomeLIFT. In it, qualified homeowners will be given $15,000 for a down payment on a house. So in the Detroit area, Wells Fargo is putting $5.25 million dollars toward this program. Why such an exact figure? It turns out that this is the amount that the bank is required to give to the area. The money it is paying is punishment for wrongdoing, but politicians and reporters all over the nation are presenting it like it is a great act of kindness.
This is all about the robo-signing scandal of the last several years. “People all over the country found themselves booted out of their homes thanks to bogus affidavits signed by ‘vice presidents’ and ‘regional managers,’ who were often scraggly kids just out of college blindly signing hundreds of documents a day, if not more.” Wells Fargo was one of many banks caught doing this and was part of a $25 billion settlement. There are various parts to the settlement, and Wells Fargo figured out this great way to spin their punishment to make it look like they are the good guys.
Taibbi documented how in most cities, the press has just gone along with Well Fargo’s framing of the issue. KMOX wrote, “Local Companies Join Forces For Home Ownership.” That was about the HomeLIFT program in St Louis that was putting in $4.75 million, “Again, this was exactly the amount specified in the court settlement.” The same thing in Fresno, “The $7.5 million Fresno program was, again, exactly the amount mandated by the Westland settlement.” And when Taibbi confronted Wells Fargo, they said it was just an extension of its CityLIFT program. But then it turns out that CityLIFT was just another court mandated program because of Wells Fargo’s discriminatory loan practices.
But I was wondering about what this would all mean if Wells Fargo were doing this voluntarily. It wouldn’t make me feel good about it. It’s kind of like the guy who beats up his wife and then brings her flowers the next day. Sure, the flowers are nice, but they hardly make up for the beating. And it is only too clear that the flowers are a kind of bribe, “Forgive me because the most recent thing I did is nice.” It’s certain that the guy is going to beat up his wife again. And he knows that the flowers work just fine — and if they fail, perhaps some jewelry.
This program is not going to make up for all the people who were wrongly thrown out of their homes. It is just a marketing campaign. But that’s the really sick part of this whole thing: this part of the settlement was explicitly meant to be marketing, “The terms mandated that the bank spend $67 million on a series of measures to repair its reputation in communities hit the hardest by foreclosures and robo-signing.” Our “justice” system is making sure that people continue to trust the banks that it wouldn’t allow to fail back in 2008. It’s disgusting.