Why Don't Corporations Admit Wrongdoing...

S

Satchel

2,500+ Posts
.... when paying millions in fines for doing wrong?

Race Matters: Bank Of America To Cough Up $335 Mil After Admitting They Were Overcharging Black Folks And Latinos


Surprise! Mortgage lenders treat minorities unfairly!

At least one bank is now being forced to own up to that well known fact and pay for their race-based shadiness.

Bank of America Corp. agreed to pay a record $335 million to resolve a government claim that its Countrywide Financial unit discriminated against minority home buyers during the frenzied days of the mortgage boom.

The Justice Department alleged that Countrywide charged higher interest rates and fees to African American and Latino home buyers than to white applicants with similar income levels and credit scores. It marks the largest residential fair-lending settlement in history.

California, one of the worst-hit states when the housing market buckled, was considered by investigators to be the epicenter for the alleged abuses by Countrywide. In one example given in the Justice Department’s report, an African American in Los Angeles who borrowed $200,000 in 2007 paid an average of $1,200 more in fees than a comparable white customer.

“Chances are the victims had no idea whatsoever they were being victimized. They were thrilled to have gotten the loan and realized the American Dream,” said Thomas E. Perez, head of the Justice Department’s civil rights division. “They had no idea they could have and should have gotten a better deal. This is discrimination with a smile.”

The $335 million will be distributed to more than 200,000 victims, nearly one-third of them from California, who took out home loans from Countrywide between 2004 and 2008.

A Bank of America spokesman said the alleged abuses occurred before the company bought Countrywide at the peak of the financial crisis in 2008.

“We reached this settlement to resolve issues about Countrywide’s alleged historic practices that occurred before Bank of America acquired the company,” spokesman Dan Frahm said in a statement. “Bank of America’s practices are not at issue.”

Seriously?

Source
 
because it doesn't play well to the masses. same reason jobama doesn't just come out and admit he fvcked up the stimufail, obamacare, and admit he is a socialist ideologue hell bent on reshaping america into an eastern european failure.
 
It's not personal, it's strictly business. Do cab companies get sued for cabbies picking up white people dressed in fancy suits over people of color? No, cause they make more money that way. BoA bought Countrywide after the incidents occurred, so the spokesperson quote is perfectly legitimate. If you think BoA should take full responsibility, I think Obama should take full responsibility for the **** economy.
 
The standard practice for corporations engaging in unethical and illegal behavior is to pay fines without any admission of wrongdoing. Since companies are like people, shouldn't more be required of them?
 
There's racist people in the world, maybe there's racist companies. If a company wants to be racist, it's their right to be. If people don't think it's a good thing, then they don't give them business. If I had been these people, I would've gotten multiple quotes from different companies and found the best option. Did anybody force these people to do their mortgage through Countrywide? No, they choose to do their business with a racist company, that's their own damn fault. What should have happened with this is people should've stopped choosing countrywide and taken away their business, costing them money and forcing them to adapt new policies.
 
Countrywide not checking the credit scores and income and other mainstream underwriting , colorblind, is shocking. So is this, if true, just as shocking if not more:

The Link

How can only 17% of African Americans have over a 723(which is the average score in America). Are credit scores racist?

Should the bank be forced to give the loan no matter the credit history as determined by the credit score? If you average 580 as a group vs another group averaging over 700 there should be different underwriting outcomes unless the whole credit score or credit system is hosed.

In my opinion the last 12 or so years have not used proper underwriting enough. Which has made the full faith and credit of the US government almost turned into a national disgrace.

If countrywide(bought by BOA)was turning down or charging more, people regardless of race , to people with credit scores in the 500's vs those in the >700 then they did nothing wrong. That should be easy to prove though. If you take the credit score out of it and then only balance by race then it could appear to be racially motivated.

someone with a 580 credit score is going to pay more for a loan than someone with 700+. That is race independent.
 
Even as some try to take this thread far afield, it must be noted that the practice of duping highly qualified minorities into B paper loans was not limited to Countrywide/BOA.

Former Chase Banker Admits His Bank Pushed Minorities Into ...
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It was Countrywide not Bank of America. Big difference, I believe that BoA is just trying to move on with this and get it done with.

Now, let's talk about Countrywide. They have or did have that big Call Center in Plano where they processed most of their loans. The funniest thing is that of their employees in the call Center that put loans together for individuals most of the loan prepares were of either Latin or African American heritage.

How do I know, they were one of our customers for about 10 years and I had countless meetings and sold them the Call Center equipment and listened to and observed hundreds of calls by their call takers.

I wonder how this translates.....

Now that is interesting
 
I am curious why this is considered a case of discrimination. Not nearly enough is known by the article presented, but even so, why discrimination?

1) Was anyone forced to enter into a deal with Countrywide? Of course not.
2) Is a business supposed to offer up pricing information? If 2 people walk onto a car lot and buy the exact same car and one pays more than the other (which is almost always the case) was the one discriminated against?
3) Were any of the supposed fees charged to minority buyers illegal? Isnt a company's goal to maximize their profit?
4) There were hundreds of free services for people to council them about home loans and what to expect. If people chose not to use those services and made bad deals is that the company's fault?

Look at the credit score issue that Zork posted. A person's credit score is completely color blind. It is based purely on mathematical formulas. Why would someone with a 580 credit score expect to get the same deal as someone with a 740 credit score.

As to why companies dont admit wrondoing is because they, in most cases, do not believe they did anything wrong. Sometimes it is just in their best interest to pay a fine and move on. The negative publicity and potential cost of fighting allegations can be far more costly than a fine.
 
Again, for those not paying attention, it must be noted that the practice of duping highly qualified minorities into B paper loans was not limited to Countrywide/BOA.
 
You'd have to ask the people who agreed to pay millions for giving B paper loans to minorities who were well qualified for A paper products.

Why don't we make corporations admit to wrongdoing? Anybody?
 
But you cared enough to read the thread and post.
rolleyes.gif
 
yup...if I didn't read it how would I know I didn't care.

Just curious......are you as concerned about our Attorney General's not admitting to wrong doing as much as you are BoA/CountryWide's?
 
I'll post this part again for emphasis:

Judge Blocks Citigroup Settlement With S.E.C. By EDWARD WYATT WASHINGTON — Taking a broad swipe at the Securities and Exchange Commission’s practice of allowing companies to settle cases without admitting that they had done anything wrong, a federal judge on Monday rejected a $285 million settlement between Citigroup and the agency. The judge, Jed S. Rakoff of United States District Court in Manhattan, said that he could not determine whether the agency’s settlement with Citigroup was “fair, reasonable, adequate and in the public interest,” as required by law, because the agency had claimed, but had not proved, that Citigroup committed fraud.
 
You can pretend not to understand all you want, but there's no getting around the judges' logic:

The judge, Jed S. Rakoff of United States District Court in Manhattan, said that he could not determine whether the agency’s settlement with Citigroup was “fair, reasonable, adequate and in the public interest,” as required by law, because the agency had claimed, but had not proved, that Citigroup committed fraud.
 
Satch,

Companies don't admit to wrongdoing for two reasons. First, it makes for bad PR (though I don't think that's always the case). Second, their public admissions are admissible in any civil or criminal proceeding. In other words, judgments can be rendered against the company and people can go to jail based on the admissions.

In the time I practiced law, I only had one company representative ever admit to doing something wrong. Every other company I sued denied fault even in the face of overwhelming and thoroughly conclusive evidence.
 
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