Bank of America Benefits from Lending Crisis, Taxpayers to Foot the Bill
From UFE's February 2008 Enews
Bank of America Benefits from Lending Crisis, Taxpayers to Foot the Bill
While many homeowners stand to lose their homes due to predatory
lending, Bank of America is setting itself up to shift millions of
dollars of corporate taxes onto taxpayers.
The bank is planning to purchase Countrywide Financial Corporation -
which has become a casualty of the subprime crisis -- for a staggering
$4.1 billion. Ironically, Bank of America is in a position to do this
having seen tremendous growth in recent years, especially from its
strong Hispanic customer base, a group disproportionately hurt by the
subprime mortgage crisis.
In his article "B of A's awesome Countrywide tax break," columnist
Allan Sloan explains the significant tax savings from the debt that the
bank will assume. "A $270 million annual deduction would save Bank of
America something more than $100 million a year in federal and state
income taxes...over the first five years, Bank of America can use a
total of $1.35 billion of Countrywide's losses to shelter its income,"
he said.
The deal has not gone through yet, but the story just got even scarier
with the "New York Times" bringing to light a confidential bailout
proposal from BOA to Congress. This proposal has some analysts thinking
that the merger with Countrywide is actually intended to make lobbying
for a bailout of BOA more successful.
Read the Allan Sloan article.
See the Motley Fool take on the sleazy side of the merger.
Read Public Campaign Action Fund's blog and respond.
See the full Enews for February 2008.