Corporate Welfare & Socialism for the rich by Google Image
Here's a conundrum the corporate controlled "lamestream' media has failed to ask, which poster child for crony capitalism has got smaller at the same time as it's got bigger? Answer -- PNC Bank, as it continues to close branches across the nation after gobbling up a slew of smaller distressed financial institutions using $7.5 billion in TARP bailout funds. And yes, you did read that correctly -- $7.5 billion, spelt with a tax-payer backed capital B!
My local PNC High Street branch in Chestertown on the Eastern Shore of Maryland will close next month as it has been unable to suck sufficient profit out of the town center. That's despite overall PNC Bank profits for 2012 being in excess of $3 billion. Its CEO, James Rohr, who is stepping down shortly, receives an annual remuneration of about $16 million including base salary, stock, share options, & other benefits. He has an accumulated wealth of over $86 million including equity holdings and a pension pot of over $29 million. Under his stewardship the share price for PNC has gone from a high of over $81 in 2008 to its current level of just over $63 -- wiping out almost a quarter of the companies value! If this is the reward for failure, then what prizes are possible for success?
Last April the Federal Reserve said it planned to penalize eight financial institutions (including PNC) with millions in fines for "unsafe & unsound' foreclosure practices. However, providing PNC complies with the government's foreclosure settlement deal it looks like these dues will never ever be paid -- thereby planting the seeds for the next housing crisis!
Also in 2012 PNC agreed to pay a $90 million settlement to a lawsuit accusing it of improperly manipulating customers debit card transactions to generate excess overdraft fees.
Only last month the US Dept of Justice announced that PNC had agreed to pay another $7.1million for failing to engage in prudent underwriting practices in connection with the issuance of loans guaranteed by the Small Business Administration. This case was brought under the False Claims Act, an arcane statute from 1863 which was prompted by vendors ripping off the federal government during the Civil War and supplying soldiers with shoddy munitions, material, food, and other goods & services -- so no change there then?
PNCs webpage trumpets the firm's corporate values with specious drivel such as "(we) are also proud of our longstanding history of supporting the communities we serve' and hypocritical nonsense like "trust us to do the right thing in all situations and circumstances'.
I could give further details of PNC's rap sheet but I think readers get the picture? This is corporate cronyism & malfeasance on an industrial scale. Never mind calling for PNC to retain its High Street branches we should be demanding that its top executives go to jail!
More realistically, perhaps instead of just lying down & taking this latest slap in the face we could come together as a real communities and fight back? Unless PNC reverses its closure decisions, maybe local Chambers of Commerce could encourage members to move their business accounts to other banks & credit unions? Residents could move their checking and savings accounts, transfer IRAs and annuities elsewhere
We, the 99% don't always have to knuckle under and take everything the self-serving 1% dishes out.