2nd Campaign Aide to DC Mayor Pleads Guilty

Another former campaign staff of Mayor Vincent Gray, who is heads the State of Columbia has stepped forward and claimed guilty for a federal offense during the politician’s bidding in the 2010 elections. This has been the second time this week that someone from the politician’s former entourage has stepped up against him.

Mr. Howard Brooks has stated that he was guilty for giving false statements to the authorities about the payments he gave to another candidate from Mayor Gray’s funds for his campaign. The first to step up was Thomas Gore, who said he was guilty of making the same payments and destroying any evidence of it. This made it clear that the campaign of the Mayor involved some dirty politics.

The participation of the Mayor in this misdeed however still remains a question for authorities. Though this current scandal is a big blow to his reputation, there has been no evidence what so ever to prove that he has been involved in the bribery. He even claimed in one federal investigation that he has no idea that his staff had been engaging in dirty tactics.

According to Gore, he shredded evidence of his payments to Sulaimon Brown, a candidate for mayor who was allegedly paid to make negative remarks about former Columbia District Mayor Adrian Fenty. There was a collusion that happened among the staffers that involved about $2,810 and Brown.

According to the documents in court, Brooks was inculcated to funnel money and pay Brown but no one was named by the papers. Brown was said to be receiving money from Brooks and the Mayor’s campaign manager Lorraine Green who is also a family friend of the Brooks. Though Green admitted she met the mayor candidate and even spoke with him in the phone, she denied having offered him cash or any privilege in the administration of Mayor Gray.

According to the officials of the administration, Brown was given a position that paid $110,000 in a year without an interview. But he was fired just after a few weeks; he then started his allegations against Gray in public.

The current mayor led by 10% of the votes against his greatest rival Fenty during the election. His platform was about reinstating the integrity of the administration. But this scandal has just done the complete opposite.

Brooks has been cooperative with the authorities in the investigation; he even wore a wire when he came to meet Gore in one of their private meetings. He would be receiving a maximum of 6 months in jail and probation rights.

Guaranty Bank Facing Guaranteed Loss

The ninth largest bank the Guaranty Bank has been facing a challenge with their financial status for five years now. The amount of their losses accumulates to about $20 million; this is according to their annual monitoring data.

By the end of the first quarter of this year, the bank had another loss of about $ 5.7 million. Furthermore, its capital which protects the bank from loss from its loans is quickly slipping away.David L. Donihue, a consultant from the bank said that they are currently facing a very hard phase.

But Doug Levy, the chief executive of Guaranty says that they are progressing into a better loan portfolio, and the bank is looking for more investors to uplift and recapitalize their finances.

The largest loss of the bank was back in September 2009 when many Americans were falling into the recession and there was massive unemployment. The losses amounted to about $ 52.3 million this is according to their Federal Deposit Insurance Corp. records. The bank has belonged to the Levy family for decades and so far no one has set their eyes on purchasing the estate from them.

During their second set or mortgages a major loss has been inflicted in the bank’s portfolio. The bank has about 160 branches in Wisconsin, Georgia, Michigan, Illinois and Minnesota. Most of the branches across these five states are found in grocery stores and operate in lengthy hours, which according to Donihue is expensive for the bank.

The Guaranty has increased another $10.6 million to its loan-reserves in order to cover for their doubtful-debt accounts.

Levy says that the bank still expects to eventually regain its loss from their loans. The recession and the financial crisis have made it compulsory for banks to have more capital.The chief executive said that Guaranty has been making efforts to retrieve their old status in their financials. They are dedicated in trying to make these efforts work, though Donihue admitted that it’s not going to be easy.

More Bad News for JPMorgan

JPMorgan Chase is in for more bad news as their credit continues to decrease these past few days. Fitch Ratings gave a lower rating of A+ to the financial agency after they lost $2 billion worth of dollars earlier last week.

According to Jamie Dimon the Chief Executive of JPMorgan, the company’s situation could get worse because they are not liquid enough and ratings companies are asking questions about their company’s risk management status, framework and practice.

The ratings industry head, says that JPMorgan Chase’s reputational and risk governance issues are not as good as they used to be however the current amount that the company is losing can be managed. According to reports JPMorgan’s, last week’s market shares was at $36.96, it went down by 9.3%, then after just a few hours it plunged further down to 0.8%  that’s $36.67.

The bank continues to be criticized and ridiculed by politicians and lawmakers as the ratio continues to drop. Thus a more convenient way for the firm is to have tighter measures and adapt to something like the Volcker Rule which can take care of too much risk-taking done by large banks.

The bank’s Executive Chief Mr.Dimon who has been getting positive regards about his efforts to get the bank back in tact has been open about his thoughts in implementing laws and regulations especially the Volcker Rule.

This however stirs questions from external sources whether the company has tried to implement the regulation in the past. However the total loss of $2 billion that was reported last week has weakened the arguments of the bank for their new measures. Bank investors are currently having difficulties in getting access to financial institutions and international trade and businesses.  Though JPMorgan Chase like the Bank of America and Citigroup have reports that can still be further evaluated, their unseen transactions and unclear records for their strategies could be destructive for them.

Consumer Financial Protection Bureau Takes the Side of Bankers

The United States’ legal watchtower against loan sharks and predatory loaners has released the best news for these financial intermediaries to date. This announcement is about the amendments in the Federal Reserve prohibition to expensive applications to credit-cards and application fees.

The old law in 2010 prohibited the charging of issuing a credit-card to be greater than 25% of the client’s credit limit in the initial year deposit. Though it did not specify the regulations on additional charges and fees, the agency opt to include them in the Act to save borrows with not so spectacular credit from being preyed upon.

The Washington Post reported that one of the financial institutions filed a law suit to the agency. According to them they were complying with the Act’s imposed limit of 25% because they only required $300 as the credit limit for clients with a yearly additional fee of $75. However, it also required clients to pay a processing fee of $95 before the customer gets to open an account. This makes it exceed the 25% boundary set by the federal board.

Last September the bank was able to get a First Primer sanction from a court located in South Dakota against the Federal Reserve. Just this week, Ohio’s very own Richard Cordray, who headed the new office of the Consumer Financial Protection Bureau, proposed the change in the initial ban of the law. They also asked the public’s opinion about the proposal.

Credit-cards are risky loans; banks charge expensive fees because there is no guarantee that all those who get them will be able to pay the loans. Moreover, if clients who fell into bad credit fail to get their hands on a credit card, it will be hard for them to reestablish a healthy attitude towards their loans.

High unemployment has never stayed at this level for a very long time since the Great Depression. This situation has been making things very difficult for a lot of Americans which is one of the main reasons for the anger and frustration raised to the big banks and Wall Street. The problem is mainly the lack of income of many individuals and families.

Walking around Wall Street, it is not difficult to find a lot of people complaining about being unemployed. The protesters are from different industries like education and construction.

One of the main protesters, Lisa Doherty is on the edge of the road with a sign saying “People Before Profits.” She is a loan processor who lost her job. Because of this, she said that she is feeling that the financial system is against her even if she used to be in the mortgage business. She shares that she cannot obtain a job from a bank as a mortgage loan processor because of her bad credit. But, she also cannot improve her bad credit because she lacks a job.

At this point Doherty shares that she does not know what she is suppose to do. She stays with her family because she cannot pay for her own place. She also has been applying for jobs in other industries like retail but she is always turned down. She expresses her strong desire for things to change since she has been looking for a job for almost three years already.

Although most protesters are unemployed, there are some who aren’t. Some are still college students who want to support the cause of the protest. Nadeem Mazen, the organizer of the protest, says that he is disappointed about the regulators and banks. He said that Ben Bernanke was the speaker of his 2006 commencement. But, the message he gave was lengthy, irrelevant and poorly composed. It was boring and some people fell asleep listening.

Although there are different messages from the protesters, majority of them raises concern about their inability to find a job.