March 10, 2014
Dear Assembly Member:
We the undersigned members of New Yorkers for Responsible Lending (NYRL) write to express our serious concerns about the Governor’s recent proposal to significantly reduce taxes on banks. The tax breaks would provide a major windfall for banks that they neither need nor deserve, and would directly undermine our State’s economy.
NYRL is a state-wide coalition founded in 2000 to promote access to fair and affordable financial services, bank accountability, and the preservation of assets for all New Yorkers and their communities. NYRL’s 161 non-profit members include community-based organizations and financial institutions, affordable housing groups, advocates for seniors, legal services organizations, housing counselors, and labor and consumer advocacy groups. Coalition members have detailed knowledge of the array of abusive lending, mortgage servicing, and other practices by the biggest banks that have devastated so many New York communities. Our groups work in low and moderate income communities around the State, which continue to suffer from a prolonged recession characterized by record income inequality, a shortage of living-wage jobs, and a drastic reduction in revenue needed to fund critical services.
The big banks don’t need a tax break. Notwithstanding the economic struggles of so many New Yorkers and New York communities, the big banks are enjoying massive profits. In all, the six biggest banks earned more than $76 billion in profits in the last year. The same six banks have total assets of
$9.7 trillion – 60% of the GDP of the entire United States. Although JPMorgan Chase paid billions of dollars in fines for engaging in an array of abusive practices, Chase still raked in $18 billion in profits in 2013, and the Chase board just raised CEO Jamie Dimon’s annual salary to $20 million. Citibank, which taxpayers bailed out after the 2008 crisis, made $13.9 billion in profits in 2013. The last thing the big banks need is a tax break, especially when New York communities are facing austerity and financial hardship.
The big banks don’t deserve a tax break. The big banks’ abusive practices have devastated New York families and communities, and were a major cause of the 2008 financial crash and economic recession. Federal and state regulators have brought dozens of enforcement actions against the biggest banks for a wide range of illegal and abusive financial practices, from mortgage lending and servicing abuses — including wrongfully foreclosing on active duty service members — to securities fraud, racial discrimination, manipulation of energy markets, money laundering, illegal payments in municipal bond deals, and criminal involvement in the Bernie Madoff scam — to name just a few. The last thing the big banks deserve is a tax break.
It is virtually impossible for legislators, let alone the public, to assess the full extent of damage this tax cut would inflict on our State’s budget. According to the Governor’s own budget forecast, however, the tax cut for banks would cost the state as much as $250 million a year, and independent estimates are significantly higher. Under the guise of “making the state more competitive,” the Governor’s proposal would create a permanent and completely unwarranted windfall for the banking industry, at a time when a reduction in tax revenue could be disastrous to distressed communities around the State.
We respectfully urge the New York State Assembly to reject the Governor’s proposal to cut taxeson banks.
Albany County Rural Housing Alliance ANHD Inc.
Brooklyn Cooperative Federal Credit Union BWICA Educational Fund, Inc.
Central New York Citizens in Action, Inc. Chhaya CDC
Citizen Action of New York
Central New York Fair Housing Council Common Law, Inc.
Consumers Union Cooperative Federal Demos
District Council 37 Municipal Employees Legal Services Empire Justice Center
Fifth Avenue Committee
Genesee Co-op Federal Credit Union Grow Brooklyn
Housing Resources of Columbia County, Inc. JASA/Legal Services for the Elderly of Queens & LEAP Long Island Housing Services, Inc.
Lower East Side People’s Federal Credit Union Margert Community Corporation
MFY Legal Services NeighborWorks Alliance of NYS Neighbors Helping Neighbors
New Economy Project (formerly NEDAP) New York Public Interest Research Group New York StateWide Senior Action Council
Parodneck Foundation for Self-Help Housing & Community Development Pathstone Enterprise Center
Pratt Area Community Council Retail Action Project
SUNY Buffalo Law School Consumer Financial Advocacy Clinic Troy Rehabilitation & Improvement Program
Urban Justice Center
Westchester Residential Opportunities Inc. Western New York Law Center