At the peak of the coronavirus pandemic, big banks will be paying some $13 billion in shareholder dividends. If this level of dividends continues for the rest of 2020, big banks could be permitted to pay out over $50 billion in dividends for 2020.
The CARES Act stimulus continues a pattern of permissive regulation of large corporations that has enabled them to channel their income to providing capital payouts to wealthy shareholders and top executives, rather than support for workers or investment towards the long-term stability and success of the firms.
In response to the COVID-19 pandemic and its devastating economic impact, Americans for Financial Reform calls on Congress and the U.S. Department of Education to use their authority to cancel federal student loan debt. Cancelling debt would be a powerful and efficient way to immediately relieve pressure on distressed borrowers, boost consumer spending at a time when the economy is contracting, and reduce hardship on people who lose income because of the pandemic and efforts to fight its spread.
Private equity has pushed into the high-priced consumer loan industry, offering payday and other consumer loans that profit off trapping borrowers in a cycle of debt. Private equity firms own over 5,000 storefront payday and online lenders that often make loans at 300% annual percentage
Private equity owns over a million U.S. apartment units. Tenants pay a price when corporate landlords buy their buildings. In some cases, private equity buyers have pushed out lower-income tenants – through rent hikes, eviction threats, and more – to flip buildings into high-rent properties to sell for big profits.
Wall Street private equity funds are continuing to snap up homes to pad their expanding portfolio of rental properties. Institutional investors own nearly a quarter million single-family rental homes. Wall Street landlords often hike rents, avoid repairs, gouge tenants with fees, and are more likely to evict tenants.
The briefing paper linked below uses Penn-Wharton and IRS data to show how the financial sector is a big winner from the passage of the Tax Cuts and Jobs Act, with almost $250 billion in tax benefits over the next decade flowing to financial firms
“Community Banks Have Returned to Profitability: The percentage of community banks that are profitable has increased every year since 2009. For the year 2015, over 95% of the nation’s 5,880 community banks showed a profit. This is up from 78% in 2010, the year Dodd-Frank passed.”
“Here are some of the major goals that the financial industry and its political allies hope to achieve through language attached to end-of-year appropriations bills. This list does not provide an exhaustive list of potential financial regulatory riders to funding bills, but does highlight the potential riders that have recently been most prominent in the debate. “
“Large regional banks like Washington Mutual, Countrywide, and Wachovia all failed during the financial crisis and placed a major strain on the financial system when they did so. These banks also played an important role in the epidemic of irresponsible mortgage lending leading up to the crisis.”