I majored/graduated with an Accounting degree, don't have my CPA. But I have a job now.
So there's this Occupy Wall Street protest in Manhattan today
- Thread starter Charlie Don't Surf
- Start date
Necronic
Staff member
See so there's two different ways to describe the housing bubble side of the crisis:
1) Banks played an intentional game of chicken with the economy and with each other knowing full well what their actions could lead to. They knew that the housing bubble was going to collapse and were trying to ride the wave as long as possible while taking advantage of the consumers in the process.
or
2) Banks were semi blind to the oncoming housing crash and the derivatives market had become so convoluted that they did not even know how much risk they were exposed to.
So you have [big intentional conspiracy] vs [bunch of people did stupid stuff]
With that choice I always go for the second. I guess I don't have the same respect for people that you do. I would never believe that a large group of people are capable of anything that complex.
It's a lot easier to blame them all for conspiracy when everyone seemingly walked away from this without punishment. That's where a lot of it comes from.
That's stupid. Your sentance makes no sense. You're essentially assuming a conspiracy (ie, someone should get punished) so that you can state that since no one got punished it must be a conspiracy.
What?
It would be more correct to say, "It's a lot easier to blame them for conspiracy than to accept that we all agreed to let them operate in this manner and thus we too are culpable."
The reason people want to believe that the bankers saw it coming and could have prevented it but actively chose not to is so they can deny personal responsibility for their own actions.
As Necronic stated, "Do not ascribe to malice that which can be adequately explained by incompetence."
They can only operate under the laws which have been provided to them. There are laws to cover all sorts of malicious acts, but the acts they committed were largely within the legal framework provided.
They may have done things that one could objectively term "immoral" but for the most part they were not illegal. Those that have been determined to have participated in illegal activities are, were, and will be prosecuted.
Where the fuck did you get that I thought they conspired to sink the economy? I said they were greedy and they created a system where they were sucking as much money as they could out of people.
They forced people into subprime mortgages because that was how they were able to suck the most amount of money out of people, they allowed those people to refinance so they could apply a steep early payment penalty and put the people even further into debt while sucking more money out of them, they then bundled those debts because they could make even more money selling off the various strips. Then they bundled up the strips they weren't able to sell bundled those together and got them rated triple A because they were able to get even more money out of them. And they leveraged themselves to the hilt in order to do this.
Is there some reason you confused my outright disgust with their piggish greed as some sort of belief that they saw what was coming? Hell no they were too busy taking advantage of the American public to look up and see what was coming down the pike.
Because the legislators and voting public all decided that giving people who couldn't afford a typical mortgage the option of using a subprime mortgage would be good for people and good for the economy.
Had the market not crashed, and had the housing bubble not popped, it would still be seen as an overall positive thing. Had only one of the two occurred, it would probably not have had the impact that it did. Both problems occurring really tossed people with subprime mortgages into the raging ocean.
Yes, it sucks, and yes, some mortgage companies did not adequately inform their clients (for which they are/were prosecuted) of their contractual obligations.
Your characterization, however, is incorrect and useless, except, I suppose, to those who have no knowledge of history and have an axe to grind.
I think you mistook what I said as some sort of pronouncement of guilt. It's not. It was a thought into the mindset of why some people are so adamant about it being a conspiracy, not an offering of proof as to WHY it could only be a conspiracy.
Personally, I attribute the whole thing to a reckless and indiscriminate attitude towards practice on Wall Street.
Necronic
Staff member
I guess I misunderstood your point, but even though you didn't directly say it you sure implied an intentional action. For instance:
Loan officers may have lied to get people into stupid mortgages. But banks didn't lie to people much more than they lied to themselves about their belief that the bubble would keep going.
No. They ran the subprime stuff because they believed that the bubble wasn't a bubble and was just going to keep growing. In an ever expanding housing market a subprime loan is a great thing for all parties involved.
Be careful with your "they"s. The bundling was an group effort with lots of different players. It was the "lots of cooks" kind of situation. With one of them doing it, it might not have been so bad, but after 20 some odd groups had their turn chopping and re-merging these things the banks themselves had no idea what was in them.
Yet again, there's "they" and then there's "they". The people that originated the mortgages were not always the ones that got the AAA ratings on the junk derivatives. There was one company (Dyneema or something like that EDIT: Its Magnatar, Dyneema is a fiber used in bulllet proof vests. Too much Jagged Alliance, derp) that was responsible for a *very* large part of the junk derivatives market. The bad mortgages may have come from banks, but the people that created the toxic assets weren't a bank in this situation. Hell, they sold this crap right back to the banks that created the bad mortgages without the banks even knowing they were in there.
See this is where I think you are attributing to malice what can be better ascribed to incompetence. The banks weren't setting up these sub-prime loans expecting them to fail. The entire investment portfolio of a lot of banks was based on the assumption that the market was going to keep on churning. They said "a-ok" to these loans, not because they wanted to take the houses over (banks aren't in the real estate business), but because the shared hallucination, between lenders and lendees, was that the boom was just going to keep on going and these sub-prime loans were no risk for *either* party because they could simply resell the property in a year for a profit.
The American people are complicit as well. It takes two people to sign a contract. Yes, loan officers did lie, and the ones that did, and their bosses that encouraged that, should be prosecuted. But its naive to think that the lendees were not also corrupted by greed. Why look over the details of a deal that is too good to be true?
It reminds me of something someone said to me once about the 419 scams. She didn't have much sympathy for the people who got taken by (some of) them, because their own greed over-rode their reason, which is why they ended up believing that there really was a nigerian prince.
Anyways, I don't actually disagree with you about the runaway greed and the excessive leveraging. I just think its silly to say that it was just banks doing it. It takes two to tango.
-----------------
You're talking about the Community Reinvestment Act. It's funny how many times I hear someone bring up the whole "the government made the banks give these loans" but they don't (or in some cases can't) even name the legislation in play. Not suggesting you're like that, but I've found it interesting.
Personally, from what I've read, the entire thing is a red herring. There's a pretty solid article on it here:
http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html
GasBandit
Staff member
I'd just like to add that there were also several attempts to reform the mortgage industry, but every time the subject came up, Barney Frank screamed "anyone who brings this up HATES BLACK PEOPLE and doesn't want them to ever have a house!" and the subject was stymied. The biggest travesty in all the "nobody was punished" stuff is that Barney Frank still has Chairmanship of the house financial services committee, much less a job at all.
Legal because they threw their weight against every attempt to regulate the securities market. Legal because they paid politicians to make it legal. Legal because they were legally able to thumb their noses at the regulators who had their teeth pulled and their arms held behind their back and were unable to investigate the fraudulent practices. Legal because they were able to convince Congress that them setting up packages for failure selling them to investors and then shorting them was legal.
So yeah Legal.
Necronic
Staff member
Seriously you guys should stop trying to blame the Community Reinvestment Act. Its complete misinformation. Even banks don't blame it. There's a good quote from the head of the FDIC on this:
Part of the reason is that a CRA qualified bank has to undergo higher levels of scrutiny and regulation on their loans. Sub-prime and ARM loans, for instance, are actually *far* less common in CRA banks than in private commercial banks.
So, you know.....quit quoting Micheal Savage and actually learn the history.
Just to highlight something from that last quote. The CRA has been around THIRTY YEARS. Its actually only been weakened since....hrm....oh yeah 2005. Right around when the toxic assets started showing up.
Part of the reason is that a CRA qualified bank has to undergo higher levels of scrutiny and regulation on their loans. Sub-prime and ARM loans, for instance, are actually *far* less common in CRA banks than in private commercial banks.
So, you know.....quit quoting Micheal Savage and actually learn the history.
They lied to people when they said they couldn't offer them prime mortgages and they lied to people when it came time to refinance.
Subprime mortgages are shit for the home buyers and awesome for the banks that's why the banks pushed the subprime loans and denied many people who would have had no problem with a 30 year fixed rate. They did this because prime mortgages are restricted by the government while subprime mortgages allow them to be as predatory as they like.
Exactly my point behind the piggish greed causing shortsightedness.
They set up countless subprime loans so that the payments would balloon 3 years down the line with the line that the person taking the loan could just refinance the loan and get another subprime loan while glossing over the prepayment penalty cost of the refinancing and all the other fees that they would tack on to the loan pushing the person further into debt. It wasn't malice it was psychotic greed and outright incompetence that I am ascribing to them.
All the different loans are set up to gouge the person borrowing the money and benefit the bank. Interest only loans, 3 year fixed rate and all the others were just ways for the lenders to tailor the loan to take the most advantage of the lendee.
There is evidence that many loan companies had entire offices dedicated to erasing answers given to them by the lendees and rewriting numbers after all the paperwork was done. How exactly are people supposed to read the details when the lenders change them?
If you're not mad yet, look at these fun graphs and facts:
http://www.businessinsider.com/what-wall-street-protesters-are-so-angry-about-2011-10?op=1
http://www.businessinsider.com/what-wall-street-protesters-are-so-angry-about-2011-10?op=1
GasBandit
Staff member
It stayed around for 30 years because we were in a 30 year boom, where 5.x% unemployment created calls of "recession!". And ONLY 1 in 4? If I took "only" 1 in 4 of your dollars out of your paycheck away from you, I bet you'd consider it a big deal. 25% is nothing to sneeze at.
But it wasn't the wording of CRA. There were constant rumblings (most notably from Andrew Cuomo, Clinton's secretary of housing and urban development) that banks "better start giving more mortgages to minorities," or else the CRA might have to be revisited and beefed up to MAKE them do it.
Another Fun Fact - in 1994, Citibank was sued for not approving enough mortgage loans to black people. Who was on the plaintiff's team of lawyers? One Barack Obama.
But it wasn't the wording of CRA. There were constant rumblings (most notably from Andrew Cuomo, Clinton's secretary of housing and urban development) that banks "better start giving more mortgages to minorities," or else the CRA might have to be revisited and beefed up to MAKE them do it.
Another Fun Fact - in 1994, Citibank was sued for not approving enough mortgage loans to black people. Who was on the plaintiff's team of lawyers? One Barack Obama.
Because the banks could make more money off the subprime they denied worthy applicants prime mortgages and instead only offered them subprime mortgages. That is what happened and that is what is meant by forced people into subprime mortgages.
Subprime mortgages lead directly to both of those outcomes. Banks wanted to eliminate the risks they faced from subprime mortgages while still maintaining the increased moneyflow from them.
Saying that subprime mortgages would be a positive thing if it weren't for the horrible results from them is like saying that Stalin was a great leader if you just ignore the millions dead. It's like shutting your eyes and using your imagination to navigate the world.
It's correct. Your understanding is flawed and your arguments that are based on those are utter nonsense.
So, the government wanted loans to minorities and first time home owners. Then the banks fucked over everyone they could. YES THE GOVERNMENT IS TO BLAME.
GasBandit
Staff member
I'm astounded how many people just expected banks to just shrug and take it in the ass when the government threatens that they "better do x" when X is a ruinous business practice. Companies, including banks, only exist so long as they can make profits. For example, the new Bank of America checking account/debit card fees are a perfect example. You can thank the ruinous joke of a "finance reform" bill from last year for that.
How is making a loan that people can actually pay back, "taking it up the ass" for a bank? You loan out $100k and get back $120k+, yep getting fucked by the government.
Are you honestly saying that the housing bubble, which has been building for decades, and the recent economic collapse are due to subprime mortgages?
Are you saying that the housing bubble had been going on for decades? The hell you smoking?Are you honestly saying that the housing bubble, which has been building for decades, and the recent economic collapse are due to subprime mortgages?
I'll concede that the housing bubble hasn't been growing for decades.
Are you still saying that the recent housing bubble and the recent economic collapse are due to subprime mortgages?
Yes. The crazy availability of credit caused housing prices to rapidly increase causing the housing bubble. Then the fact that banks thought this was the never ending money through blinded them to the risks and leveraged themselves to the hilt in order to maximize profits and when housing prices dropped they didn't have enough liquid reserves to remain solvent and couldn't borrow any money from the other banks because they didn't have enough money to remain solvent much less loan it out.
How on earth do you explain either the housing bubble or the economic collapse in the absence of subprime mortgages?
GasBandit
Staff member
Except when the people you're making that loan to default with cynical predictability. There's a reason "bad risk = big interest." The whole thing with subprimes was creative accounting mathematisorcery to figure out a way to do the whole low interest, high risk thing. Obviously it didn't work, because it doesn't matter how much you massage the numbers, you won't be arithromancing the insolvent into homeownership.
Necronic
Staff member
Subprime/ARM lending, in a market with low interest rates and increasing home-prices, is a win win for everyone, banks and borrowers alike.
Also I don't know what you're talking about with the regulation on prime mortgages that doesn't exist on subprimes. The term "subprime" isn't even a legal term. It just means high risk loans.
But hey, lets just ignore the 80s. Here's the breakdown by year of how much of the mortgage market was subprime by year, starting from the mid 90s:
1994: 5%
1996: 9%
1999: 13%
2006: 20%
You can see an escalation of subprime lending that started gradually inching upwards in the 90s, but really boomed in the last 10-15 years. But for the first FIFTEEN years of the CRA, there was really no significant amount of subprime lending going on in the market, CRA or no.
Sure, you can argue that the changes in 95 are what pushed it over the top, but lets look at the next point.
75 or 25?
More bad loans were originated from firms that had ZERO regulation by the CRA than firms that did.
This means that companies with ZERO motivation from the CRA to do these high risk loans were doing them anyways, and at a faster rate than companies regulated by the CRA. Whatever the motivation to make these loans was, it clearly wasn't the CRA for the vast majority.
I mean, I can pick and choose the letters CRA out of that (I bolded them), but other than that I don't see the CRA mentioned.
But hey, why should I expect a legal document to describe the law that the suit is being brought under. Clearly the better source is the New York Post (where this whole "connection" was identified) .
Edit: Also, since it's clear people have spent more time reading blogs about the law than actually reading the law, here's the entire CRA (it's not that long nbd)
Notice how many times the phrase "consistent with the safe and sound operation of such institutions." appears in the document.
Ah ok, I gotcha, we're one the same point I just misunderstood what you were implying. I thought you were saying that greed led to rational "screw them over", but you were saying it led to irrational "screw them over". So we both agree that the banks were being irrational.
Actually like I said above, in a boom market they're great for everyone. Until the market busts of course, which it undoubtedly will.Dubyamn said:
Also I don't know what you're talking about with the regulation on prime mortgages that doesn't exist on subprimes. The term "subprime" isn't even a legal term. It just means high risk loans.
30 year boom. Really. Guess the 1980s never happened huh. I'll grant that there was a 15-20 year boom from the mid 90s to recently, but the 80s were by no means a good time for housing (with mortgage rates almost guaranteed to be in the double digits) or employment for that matter (5.x% != 9.8%)Gasbandit said:
But hey, lets just ignore the 80s. Here's the breakdown by year of how much of the mortgage market was subprime by year, starting from the mid 90s:
1994: 5%
1996: 9%
1999: 13%
2006: 20%
You can see an escalation of subprime lending that started gradually inching upwards in the 90s, but really boomed in the last 10-15 years. But for the first FIFTEEN years of the CRA, there was really no significant amount of subprime lending going on in the market, CRA or no.
Sure, you can argue that the changes in 95 are what pushed it over the top, but lets look at the next point.
Let me ask you something. Which is a bigger number?
75 or 25?
More bad loans were originated from firms that had ZERO regulation by the CRA than firms that did.
This means that companies with ZERO motivation from the CRA to do these high risk loans were doing them anyways, and at a faster rate than companies regulated by the CRA. Whatever the motivation to make these loans was, it clearly wasn't the CRA for the vast majority.
Here's the Case Summary:
So they were sued under ECOA, The Fair Housing Act, and the Thirteenth Amendment.
I mean, I can pick and choose the letters CRA out of that (I bolded them), but other than that I don't see the CRA mentioned.
But hey, why should I expect a legal document to describe the law that the suit is being brought under. Clearly the better source is the New York Post (where this whole "connection" was identified) .
Edit: Also, since it's clear people have spent more time reading blogs about the law than actually reading the law, here's the entire CRA (it's not that long nbd)
Sec. 801.
This title may be cited as the ``Community Reinvestment Act of 1977´´.
[edit] Sec. 802.
(a) The Congress finds that—
(1) regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business;
(2) the convenience and needs of communities include the need for credit services as well as deposit services; and
(3) regulated financial institutions have continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.
(b) It is the purpose of this title to require each appropriate Federal financial supervisory agency to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions.
[edit] Sec. 803.
For the purposes of this title—
(1) the term “appropriate Federal financial supervisory agency” means—
(A) the Comptroller of the Currency with respect to national banks;
(B) the Board of Governors of the Federal Reserve System with respect to State chartered banks which are members of the Federal Reserve System and bank holding companies;
(C) the Federal Deposit Insurance Corporation with respect to State chartered banks and savings banks which are not members of the Federal Reserve System and the deposits of which are insured by the Corporation; and
(D) the Federal Home Loan Bank Board with respect to institutions the deposits of which are insured by the Federal Savings and Loan Insurance Corporation and to savings and loan holding companies;
(2) the term “regulated financial institution” means an insured bank as defined in section 3 of the Federal Deposit Insurance Act or an insured institution as defined in section 401 of the National Housing Act; and
(3) the term “application for a deposit facility” means an application to the appropriate Federal financial supervisory agency otherwise required under Federal law or regulations thereunder for—
(A) a charter for a national bank or Federal savings and loan association;
(B) deposit insurance in connection with a newly chartered State bank, savings bank, savings and loan association or similar institution;
(C) the establishment of a domestic branch or other facility with the ability to accept deposits of a regulated financial institution;
(D) the relocation of the home office or a branch office of a regulated financial institution;
(E) the merger or consolidation with, or the acquisition of the assets, or the assumption of the liabilities of a repulated financial institution requiring approval under section 18(c) of the Federal Deposit Insurance Act or under regulations issued under the authority of title IV of the National Housing Act; or
(F) the acquisition of shares in, or the assets of, a regulated financial institution requiring approval under section 3 of the Bank Holding Company Act of 1956 or section 408 (e) of the National Housing Act.
[edit] Sec. 804.
In connection with its examination of a financial institution, the appropriate Federal financial supervisory agency shall—
(1) assess the institution's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of such institution; and
(2) take such record into account in its evaluation of an application for a deposit facility by such institution.
[edit] Sec. 805.
Each appropriate Federal financial supervisory agency shall include in its annual report to the Congress a section outlining the actions it has taken to carry out its responsibilities under this title.
[edit] Sec. 806.
Regulations to carry out the purposes of this title shall be published by each appropriate Federal financial supervisory agency, and shall take effect no later than 390 days after the date of enactment of this title.
This title may be cited as the ``Community Reinvestment Act of 1977´´.
[edit] Sec. 802.
(a) The Congress finds that—
(1) regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business;
(2) the convenience and needs of communities include the need for credit services as well as deposit services; and
(3) regulated financial institutions have continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.
(b) It is the purpose of this title to require each appropriate Federal financial supervisory agency to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions.
[edit] Sec. 803.
For the purposes of this title—
(1) the term “appropriate Federal financial supervisory agency” means—
(A) the Comptroller of the Currency with respect to national banks;
(B) the Board of Governors of the Federal Reserve System with respect to State chartered banks which are members of the Federal Reserve System and bank holding companies;
(C) the Federal Deposit Insurance Corporation with respect to State chartered banks and savings banks which are not members of the Federal Reserve System and the deposits of which are insured by the Corporation; and
(D) the Federal Home Loan Bank Board with respect to institutions the deposits of which are insured by the Federal Savings and Loan Insurance Corporation and to savings and loan holding companies;
(2) the term “regulated financial institution” means an insured bank as defined in section 3 of the Federal Deposit Insurance Act or an insured institution as defined in section 401 of the National Housing Act; and
(3) the term “application for a deposit facility” means an application to the appropriate Federal financial supervisory agency otherwise required under Federal law or regulations thereunder for—
(A) a charter for a national bank or Federal savings and loan association;
(B) deposit insurance in connection with a newly chartered State bank, savings bank, savings and loan association or similar institution;
(C) the establishment of a domestic branch or other facility with the ability to accept deposits of a regulated financial institution;
(D) the relocation of the home office or a branch office of a regulated financial institution;
(E) the merger or consolidation with, or the acquisition of the assets, or the assumption of the liabilities of a repulated financial institution requiring approval under section 18(c) of the Federal Deposit Insurance Act or under regulations issued under the authority of title IV of the National Housing Act; or
(F) the acquisition of shares in, or the assets of, a regulated financial institution requiring approval under section 3 of the Bank Holding Company Act of 1956 or section 408 (e) of the National Housing Act.
[edit] Sec. 804.
In connection with its examination of a financial institution, the appropriate Federal financial supervisory agency shall—
(1) assess the institution's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of such institution; and
(2) take such record into account in its evaluation of an application for a deposit facility by such institution.
[edit] Sec. 805.
Each appropriate Federal financial supervisory agency shall include in its annual report to the Congress a section outlining the actions it has taken to carry out its responsibilities under this title.
[edit] Sec. 806.
Regulations to carry out the purposes of this title shall be published by each appropriate Federal financial supervisory agency, and shall take effect no later than 390 days after the date of enactment of this title.
Notice how many times the phrase "consistent with the safe and sound operation of such institutions." appears in the document.
GasBandit
Staff member
Now you're just picking nits and arguing semantics. It's not just the CRA that is the problem, it was the entire mentality of "banks have lots of money so make them take losses so our constituents can thank me for getting them houses."
And you really believe that the phrase "consistent with the safe and sound operation of such institutions" actually means anything to these people?
And you really believe that the phrase "consistent with the safe and sound operation of such institutions" actually means anything to these people?
When your industry, from the moment it was started hundreds of years ago, has consistently been considered a den of thieves and scam artists, it should really say something about your line of work and the kind of people in it.
GasBandit
Staff member
... congress, or banks?
Necronic
Staff member
Heh.
Ok yeah I guess I am nitpicking a bit. The CRA did have a role in this. But it was one of many different issues:
-Fannie/Freddie Securitization of CRA loans
-Repeal of Glass/Steagal and other deregulations
-Automated Undewriting/Reduced Loan Documentation
-Speculators shift from the internet boom to the housing boom
It was a perfect storm. If you remove one of these the entire recession changes, and may not have even happened.
I guess I'm just a bit bitter about the whole thing because I sit through this class where the professor goes on and on about how it's entirely because of the CRA, and doesn't make an argument mind you, just asserts that. And doesn't allow us to discuss the topic.
Ok yeah I guess I am nitpicking a bit. The CRA did have a role in this. But it was one of many different issues:
-Fannie/Freddie Securitization of CRA loans
-Repeal of Glass/Steagal and other deregulations
-Automated Undewriting/Reduced Loan Documentation
-Speculators shift from the internet boom to the housing boom
It was a perfect storm. If you remove one of these the entire recession changes, and may not have even happened.
I guess I'm just a bit bitter about the whole thing because I sit through this class where the professor goes on and on about how it's entirely because of the CRA, and doesn't make an argument mind you, just asserts that. And doesn't allow us to discuss the topic.
No it's a win for the banks and a lose for the borrowers. How exactly do you not see that the banks set up the system to maximize profits off the backs of the people they lended to.
They set out to screw over everybody who they lended to. They were perfectly rational when they set up the system to suck every dollar out of the people they lended to. They were completely stupid to leverage themselves so throughly or forget the #1 rule of lending but it was rational when their goal was to maximize profits.
Actually like I said above, in a boom market they're great for everyone. Until the market busts of course, which it undoubtedly will.[/quote]
They're set up to be terrible for the borrower. ARMs are set up so that when the rate increases the banks get more money and the lendee would be required to borrow more money from the bank and pay the prepayment penalty.
Why do you keep on talking about the banks when you have no idea what the hell you are talking about?
Subprime mortgages are mortgages that didn't meet the Fannie and Freddie underwritting guidelines. That is the exact definition and due to them having to meet Fannie and Freddie guidelines the banks couldn't tie in all the little things they used to gouge thousands of Americans out of billions of dollars.