Jesse Jackson Takes Aim At Banking Industry

Jesse Jackson Takes Aim at Banks

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Jesse Jackson takes Wall Street bankers to task for poor business practices. (Source: Marcia Wade Talbert, Black Enterprise)

Jesse Jackson Sr. called for a “Stimulus Part II” at a news conference outlining the goals of the 13th Annual Wall Street Project Economic Summit held Wednesday in New York City. The impact of foreclosures, Depression-level unemployment in the black community, and rising healthcare costs show that the stimulus act approved by President Barack Obama left conditions rough for many on Main Street while Wall Street was heavily subsidized, Jackson said.

Jackson, a protégé of Dr. Martin Luther King Jr., launched the summit more than a decade ago to increase economic empowerment for African Americans. It has been held every year on the eve of King’s birthday since 1997. The theme for the 2010 summit, “Targeted Stimulus: A Call to Equity & Parity,” focuses on strategies to invest in job creation, minority businesses, and underserved communities. The summit runs from Jan 13-15.

Jackson has placed much of the blame for the country’s economic troubles on a banking industry that has “run wild without accountability,” making historically record profits while simultaneously circumventing fair lending laws.

“Painfully little has changed” since the bailout, said Jackson in reference to the government’s lack of oversight within the financial community. “It is painful for us and little change for them.”

To help curb the pattern of ignoring the little guy, the country will need to revisit infrastructure of Wall Street regulations, place a moratorium on foreclosures, and plan a job intervention, Jackson said.

With a hope to hold large banks accountable, the Rainbow/PUSH Coalition, which sponsors the summit, plans to attend the shareholder meetings of the top five banks in 2010 and encourage Congress to pass laws for more stringent regulation and oversight. In addition, Jackson along with Mark Morial, president of the National Urban League will announce at the summit a plan to create three million new jobs.

After the news conference, Jackson sat down with to discuss the issues at hand, the responsibility of banks, and the regulation that he says is desperately needed. How is the banking industry’s record on mortgage modifications?

Jesse Jackson: They have not done it. The Wall Street bailout includes 45 banks that have not modified home foreclosures. It’s an abuse of power. There are 3.3 million homes eligible for modification; they’ve modified 1%. One bank had 200,000 homes eligible and modified 98.

The president called for a meeting of the top 10 banks that received bailout money and three didn’t show up for the meeting. I think that’s an act of contempt. Right now we are fortifying banks but not restructuring them. In the mean time the people are expanding into poverty.

Why is the White House having such a hard time getting the banks to modify mortgages?

The president met with the banks to get them to do the right thing. The attorney general should have been at the meetings because we are protected by the law and not by an appeal [to do the right thing.]. I am convinced that unless there is a revival of the Glass-Steagall Act, [which decentralizes banking power by separating commercial and investment banking and establishes the Federal Deposit Insurance Corp. as a regulator,] and also a major intervention by the Securities and Exchange Commission then nothing will happen.