Friday, March 7, 2014
Jax Biz Journal Embraces Criminal Enterprise
It is indicative of the low ethical standards of the business press and local economic boosters that they would celebrate the arrival of a criminal enterprise to the First Coast. That would be JP Morgan Chase. Chase recently announced that it intends to expand in the Jacksonville market and it just opened its newest branch in Ponte Vedra Beach. This is all interpreted as positive news from a community obviously desperate for any sign of economic life.
JP Morgan Chase is a financial institution that has been cited for serial criminal violations and recidivism related to rigging bids on Municipal Bonds, the packaging of bad mortgage loans as collateralized debt obligations, association with Bernie Madoff Securities, and assisting Enron in manipulating their financial performance. This is the short list.
Since Jacksonville likes to think of itself as a “military-friendly” community, local residents might be particularly interested in JP Morgan Chase’s violation of the Servicemembers Civil Relief Act (SCRA) that involved charging higher-than-allowed interest on thousands of active-duty service members’ mortgages, and foreclosing on the homes of service members during their deployment.
Yes, it is a long and glorious record of “malfeasance”, to use the innocuous terminology preferred by the defenders of corporate crime. For each of these acts, Chase has paid hefty fines, including $13 billion on the mortgage-backed securities debacle. But no individuals have served prison time or been prosecuted. And JP Morgan Chase remains a highly profitable financial entity.
But to the point of community economic development -- do we really need more global bank branches in Jacksonville? The only neighborhoods in Jacksonville that need bank branches are those that currently have none, and in which Chase will have little interest in investing.
If the Jacksonville Business Journal (JBJ) wants to celebrate banking they might devote their energy toward encouraging and supporting local community-based credit unions rather than the global banking giants who base decisions entirely on profitability rather than community needs. There is no reason to ever assume that pursuit of the former will advance the latter.
This is a firm that earned $18 billion last year but recently announced that it would have to layoff 8000 employees.
One local bank executive, in response to the news about local Chase expansion, was quoted in the JBJ as saying “Competition makes everybody a little sharper so that’s good for everyone”. Does anyone really believe competition in the financial sector is "good for everyone"? The recent historical record would indicate otherwise with financial institutions responding to competition by devising methods and techniques for more effectively bilking customers with fees and penalties, and engaging in shady and illegal banking/investment practices for which they are occasionally held responsible.