Abacus documentary

[eseum]

I watched "Abacus: Small Enough To Jail" last night on Netflix. It was a pretty interesting documentary concerning a bank servicing New York City's Chinatown. The bank was founded by local Chinese American business men to serve their community. The bank was prosecuted for mortgage fraud but found not guilty on all charges. I recommend it to anyone who might like to watch it.

 

https://www.netflix.com/title/80145790

[Randy W]

An interesting quote from Wikipedia, about why THEY were chosen for prosecution, rather than the big boys.

 

The film centers on the Abacus Federal Savings Bank, a family-owned community bank situated in Manhattan's Chinatown in New York City which, because it was deemed "small enough to jail" rather than "too big to fail", became the only financial institution to actually face criminal charges following the subprime mortgage crisis.

 

[eseum]

It was pointed out in the documentary that they sold over 3000 mortgages to Fanniemae that were supposed to be suspect. Of those, only 9 went belly up. Their percentage of defaults were way lower than other banks.

 

They had actually fired one person they discovered falsifying loans and reported it to banking authorities prior to any effort by the DA to look into them. They talk about the cash economy in Chinatown and how that represents challenges for banking as well.

 

While there were a number of employees gaming the system it does not appear that the higher officials new what was going on. An interesting stroy.

[amberjack1234]

Randy, I always felt like the perpetrators should have been heavily fined and jailed and let the banks replace them with reputable folks that is if there are any.

[Greg.D.]

The documentary on Abacus Federal Savings Bank is also on Amazon Prime; so is "Too Big to Fail".

 

The loan officer who was caught and fired (and turned witness for the prosecution) was fired because he was forcing the clients/borrowers to pay him cash on the side to show their appreciation. He lied so much in court his plea agreement was revoked and he did go to jail.

[eseum]

Back in 1984, I changed jobs and moved from OH to TN. At the time, the Federal government was prosecuting a case against the Butcher brothers and a bank they were operating. They were making illegal loans among other things. It had a disastrous effect on the TN economy. A number of surety companies went under, which caused problems for some coal mines that had bonds through them. It also caused problems for people buying homes and operating businesses. The brothers were convicted. I haven't looked kindly on banks since then.