An impromptu phone call between Kamala Harris, then-Attorney General of California, and Jamie Dimon, CEO of JPMorgan Chase, escalated almost immediately right into a confrontation.
“We were like two dogs in a fight,” Harris recalls in her 2019 autobiography, The Truths We Know: An American Journey.
The two clashed over a proposed settlement. The major Wall Street banks were negotiating with a consortium of state attorneys general to assist homeowners whose homes had been foreclosed on through the Great Financial Crisis. The banks, which included Wells Fargo, Bank of America and JPMorgan Chase, offered between $2 billion and $4 billion in compensation for California alone. Harris considered that quantity inadequate, and the banks eventually increased their offer by nearly tenfold.
“During the foreclosure crisis, I took on the big Wall Street banks and won $20 billion for California families,” Harris said in a campaign speech on Monday, acknowledging her success.
Her book details the crucial, if tense, conversation she had with Dimon. Frustrated together with her lack of progress in working with JPMorgan’s general counsel, Harris decided to call Dimon – one among Wall Street’s most revered CEOs – directly, in accordance with her autobiography. As Harris recounts, the 2 were on the phone inside 10 seconds and tempers were running high.
“You are trying to steal from my shareholders,” [Dimon] “almost screamed as soon as he heard my voice,” Harris writes. To which an indignant Harris replied, “‘Your shareholders? My shareholders are the homeowners of California. Come and visit them. Talk to them about who was robbed.'”
The conversation remained heated before Dimon told Harris he would discuss the matter together with his board. Two weeks later, Harris said, the banks increased their offer nearly tenfold, offering California a deal that might ultimately end in $20 billion in relief for homeowners.
“I’ll never know what happened on Dimon’s side,” Harris said. “But I know that two weeks later the banks gave in.”
Harris and the American economy get to know one another (again)
More than a decade later, California is the epicenter of the country’s housing crisis, and Harris is the incumbent vp and certain Democratic presidential nominee. She received the endorsement of President Joe Biden on Sunday after he announced he wouldn’t seek a second term. California’s housing crisis was deepening long before the Great Financial Crisis, but since then construction has collapsed in every single place; the state Home prices And Rent are far higher than the national average, and it has the largest homeless population within the countryBut for Harris, the ordeal is a testament to how she has found an answer to housing woes, one among the nation’s most intractable problems, within the state where the situation is most acute. And it’s also a testament to her commitment to working with the company world, albeit controversially on this case.
Since her heated phone call with Dimon in 2011, the 2 have tried to construct a productive relationship. had lunch within the White House in March, as first reported by the Financial Times. At the time, the Biden administration’s relationship with the American economy was strained. The president had called for higher taxes on corporations and brought an especially tough stance on antitrust enforcement. In the past, Harris has been far friendlier to the American economy than other Democratic politicians, once referring to Google as her “family.” In recent weeks, there have been reports that she Courting CEOswithin the hope that they cringe by Trump’s unorthodox Economic and trade policy.
Harris has also leaned on top executives when she felt they may help her achieve policy goals. For example, when the Biden administration distributed pandemic relief loans in 2021, named CEOs of top banksincluding Dimon, to see if they may pass them on to low-income borrowers more quickly, so Bloomberg.
But because the comparison with the homeowners shows, it leaves the massive firms no probability in relation to enforcing the law, although the Los Angeles Times once suggest The way they handled the agreement was not optimal, because the bankers evaded criminal charges.
From 4 billion to twenty billion dollars
It was dangerous lending practices that fueled the subprime mortgage crisis, which in turn led to what we now know because the Great Financial Crisis. Foreclosures skyrocketed in 2008, and greater than 861,000 families lost their homes, CNN reported on the time. That same yr, greater than 236,000 homes were lost to foreclosure in California alone, accordingly The Los Angeles Times.
The settlement negotiated by Harris was intended to supply much-needed relief to homeowners affected by the crisis. At one point during negotiations, nonetheless, Harris abandoned settlement talks altogether, frustrated by the banks’ low offer. This move paid off when she eventually negotiated a separate settlement for California; in 2012, the banks gave the state $18.4 billion in debt relief and one other $2 billion in financial aid.
“This outcome is the result of the demand that California should receive a fair deal that is commensurate with the damage done here,” Harris said on the time, in accordance with a release from the day of the settlement. “We insisted on relief for California homeowners and demanded enforceability so that homeowners actually see a benefit that allows them to stay in their homes, and we retained our ability to investigate bank crime and loan usury.”
Under these conditions, homeowners could either lower their mortgage payments or sell their home for lower than they owed the bank, forcing the banks to take losses. Many more Californians than expected selected the second option, the Critics say didn’t live as much as the spirit of the agreement, which was to assist people stay of their homes – and never sell them. In a 2016 interview with the Los Angeles Times, Harris said this unexpected result was a consequence of the final economic difficulties brought on by the housing crisis.
“There were many homeowners who simply did not want to bear the burden of debt because they had also lost their jobs,” she said.
