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MBNA
and Bank of America (BofA) have announced plans to merge.
The $35 billion deal would create a combined
financial giant with 20% of the U.S. credit card market.
Both companies have a
track record of lending
practices that harm consumers.
Bank of America has a strikingly disparate lending
record and is extensively involved in subprime lending.
MBNA's record of mortgage lending is questionable,
and has a history of spending heavily to influence federal
legislation that will increase its own profits at
consumers' expense.
The
two companies and their employees have given federal
candidates and parties nearly $22 million over the past 15
years—making a merged BofA-MBNA America's top corporate
contributor (Charlotte Observer, July 7,
2005).
BofA made more than 2.4 million in campaign
contributions last year.
In
2004, MBNA surpassed Enron as the single largest donor to
George W. Bush. MBNA
showered millions on federal candidates (more than 1.5
million in 2004 alone) as it took a leading role lobbying
for bankruptcy “reform” – legislation passed by
Congress and signed by President Bush on April 20, 2005
that will make it much harder for consumers to file
for bankruptcy.
Next
Tuesday, September 27, the Delaware State Bank
Commissioner will hold a public hearing in Wilmington,
Delaware on the proposed merger.
You
can take action today to speak out against this
concentration of economic power by two huge financial
corporations who use profits earned on the backs of
consumers to advance their predatory political agendas.
Send a letter via e-mail asking the Bank
Commissioner to oppose this merger. Just follow the below directions.
Let the Bank Commissioner know this merger is bad for
consumers and harmful to the democratic and economic
health of our country!
1. Below is a
sample form letter. Copy
(Ctrl+C) and paste (Ctrl+V) this text into your e-mail.
2. Address the e-mail to the Delaware State
Bank
Commissioner's Office (Dawn Coffman, administrative
specialist to the Bank Commissioner): “dawn.coffman@state.de.us".
3. Type in your name and address at the bottom of the
letter.
4. Include the
following subject line - "Attention:
Please Oppose Bank of America-MBNA Merger".
SAMPLE
FORM LETTER:
Robert
A. Glen
Delaware
State Bank Commissioner
555 E. Loockerman Street, Suite 210
Dover, Delaware 19901
Attention: Please
Oppose Bank of America-MBNA Merger
Dear Mr. Glen:
I am writing to
urge you to oppose the merger of Bank of America (BofA)
and MBNA. This
merger should not be allowed to occur for several reasons. Beyond the anti-competitive nature of the proposed merger,
both parties have a track record of lending practices that harm consumers.
Bank of America has a strikingly disparate lending
record, and is extensively involved in subprime lending.
MBNA's record of mortgage lending is questionable,
and has a history of spending heavily to influence federal
legislation that will increase its own profits at
consumers' expense.
A
merged Bank of America-MBNA’s credit card division would
become the largest in the nation, with 40 million active
cardholders and $143.2 billion in outstanding balances—a
market share over 20% according to The New York Times,
July 2, 2005. If
this merger is approved, the top ten credit card issuers
would control over 80% of the market. Already,
credit card pricing is anything but competitive.
While the prime rate fell by 4.5% (from 8.75% in February
2000 to 4.25% in November 2002), the average credit card
interest rates fell by only 1.52% during this period (from
14.3% to 12.78%).
The
two companies and their employees have given federal
candidates and parties nearly $22 million over the past 15
years—making a merged BofA-MBNA America's top corporate
contributor (Charlotte Observer, July 7, 2005).
MBNA showered millions on federal candidates (more
than 1.5 million in 2004 alone) as it took a leading role
lobbying for bankruptcy “reform” – legislation
passed by Congress in April, 2005 that will make it much
harder for consumers to file for bankruptcy.
BofA’s lending
record shows disparate treatment of minorities.
In Delaware, during 2004 BofA denied applications
of African Americans 2.99 times more frequently than
whites and Hispanics 3.31 times more frequently than
whites. In
its home state of North Carolina, BofA in 2004 denied the
applications of African Americans 2.11 times more
frequently than whites and was 3.19 times more likely to
confine African Americans to higher cost / rate spread
loans than whites. Nationwide
in 2004, for home purchase loans BofA denied applications
from Hispanics 2.104 times more frequently than from
whites, and non-Hispanic Blacks 2.063 times more
frequently than non-Hispanic whites.
In 2004, MBNA’s
rejection rate on refinance loan applications for white
borrowers was 35%. For African American borrowers it
was 54%. For
Hispanic borrowers it was 82%.
Over 48% of MBNA’s loans to African-Americans in
2004 were high cost loans.
Bank of America is
extensively involved in subprime lending.
It controls a majority stake in the subprime lender
OwnIt Mortgage. It
securitizes high interest rate loans through Banc of
America Securities, LLC, Banc of America Mortgage Capital
Corporation and its 100%-owned (but generically-named)
subsidiary Asset Backed Funding Corporation—a Delaware
corporation. It
purchases loans of subprime lender Ameriquest—which just
settled predatory lending charges with multiple states.
Finally, BofA arranged a syndicated credit line for
Advance America—the largest U.S. payday lender, with
2,208 stores in 34 states. Bank of America has
assets of $736 billion at Advance America as of end of
2003.
In
past mergers, BofA has ignored community concerns and
reneged on agreements to maintain jobs.
Since NationsBank merged with BankAmerica in 1998,
the bank’s relationships with non-profits in California
have diminished. When
BofA merged with FleetBoston in 2003, BofA made a written
promise to base six bank divisions in Boston and to
maintain employment levels for “customer-facing
positions” such as bank tellers. Within weeks of
gaining approval from state regulators, BofA moved two of
the six divisions and proceeded to lay off hundreds of
branch-office workers and outsource hundreds of jobs.
For these reasons, the
merger of Bank of America and MBNA should be denied.
Sincerely,
Name:
Address:
City:
State:
Zip:
If
you'd like to print blank form letters for others to sign,
or to help spread the word about this campaign by
distributing posters, below are links to downloadable
materials:
click
to print blank form letter
click
to print 8 1/2" X 11" poster
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