Saturday, November 26, 2011

Hempstead, N.Y., Pulls $12.5 million From Chase Bank

The Village of Hempstead, N.Y., sounds like a posh resort in the Hamptons. But if you ride the train an hour east from Penn Station, what you'll find is a working-class town of about 54,000 people, more than 80 percent of them African-American and Hispanic.

Nearly a third of local residents are underwater on their mortgages, six times the state average. Mayor Wayne Hall says he heard story after story from local residents who tried to get banks to refinance their loans but couldn't. Finally, Hall got fed up.

"Since Chase was bailed out like all the other banks by our money ... then they could at least help our citizens out by modifying their loans," Hall said. "So we decided that if they can't help them, then we don't need to keep our money there."

Hempstead officials decided in April to take the $12.5 million in the village's bank accounts — all of them with Chase bank — and move them to a smaller competitor. Since then, several other communities in New York state have followed suit, including Freeport and Binghamton.

Hall concedes, however, that it may take more than that to get Chase's attention.

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