What is equity stripping and why is Wells Fargo doing it?

This is what Cook County in Illinois is going after Wells Fargo for doing.

“Equity stripping is an abusive form of ‘asset based lending’ that maximizes lender profits based on the value of the underlying asset and onerous loan terms, while in disregard for a borrower’s ability to repay,” according to the complaint. Aimed also at minority women, the bank’s fee structure and its practice of bundling mortgages to sell as securities allowed the lender to make money off loans even in the event of a foreclosure, the county said.

The practice outlined above was the cause of the financial collapse in 2008. If Wells Fargo is still practicing predatory lending, then that can only mean that nothing was learned by their c-suite. Maybe next time when the economy collapses (I hear 2016) Wells Fargo will be bought by some other bank—their stock value reduced to fumes–similar to how they acquired Wachovia after the financial collapse.

This is why people are protesting not only in opposition to police brutality, but also in defiance of the racialized and oppressive economic system in place in this country. Whether it’s low wage work, student loan debt, institutional racism and overt racism–they’re all connected. So it’s hands up, don’t shoot for Michael Brown, justice for Eric Garner and low pay is not OK for all of the retailers and fast food joints.

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