Thursday, December 10, 2009

ACORN Document Dump: Citibank Jeopardizes Customers for ACORN

What does the Persian Gulf emirate of Dubai and ACORN have in common?  Both of them have some bankers on Wall Street worried.  When brokers and traders returned to work after the Thanksgiving Holiday, the Dow Jones Industrial Average went on a wild rollercoaster ride dropping as much as 233 points during the trading session due to an announcement that Dubai would be rescheduling the repayment of $3.5 billion in bonds.  This unexpected announcement was not what Wall Street wanted to hear on Black Friday when retail sales were already down by 8% compared to the prior year and Cyber Monday sales were less than robust with individual online purchases being 2% less than they were last year.  All of this at a time when brokers, traders and economists across the country are watching to see if cash strapped consumers are going to bailout retailers from what is shaping up to be a dismal retail Christmas season.


It is understandable why Wall Street would be concerned about Dubai.  Why would they be concerned about ACORN?  On October 24, 2009, revealed that the San Diego office of ACORN dumped thousands of documents into a dumpster in advance of an investigation into the organizations activities by California Attorney General Jerry Brown.  I retrieved the documents from a shared public dumpster located behind the local ACORN office.  The documents that were retrieved filled the back of my Suburban.  Much of what was retrieved was truly trash, items such as banana peels, coffee grounds and marketing materials. After sorting through the documents, though, the 20,000 documents that were retained included sensitive personal information, financial records and documents outlining the internal and political workings of ACORN.  One of the documents obtained by shows that ACORN had business relationships with 28 major financial institutions for the purpose of assisting homeowners whose mortgages were in foreclosure.

ACORN – Citibank Flyer _Redacted_

Citigroup was one of the 28 financial institutions with which ACORN had a business relationship.  ACORN operated a Citi Outreach program where employees of ACORN were provided personal information for Citigroup’s customers and would make contact with borrowers who fell behind on their mortgage payments.  The objective of the program was to get homeowners to contact ACORN Housing Corporation (AHC).  Testimony provided to members of two congressional committees, the House Oversight & Government Reform Committee and the House Judiciary Committee, revealed that ACORN used the Citi Outreach program, as well as a program operated on behalf of Bank of America, as a membership recruiting tool where homeowners where expected to pay monthly membership dues to ACORN prior to receiving assistance.  Testimony provided by Anita MonCrief, a former ACORN employee turned whistle-blower, sated that ACORN had quotas for membership recruitment.  Documents provided to show that regardless of whether the homeowner was assisted or not, ACORN was paid by Citigroup as long as a current phone number was obtained.  The document also shows that ACORN employees were well aware of the need to keep these documents and records private due to state and federal privacy laws.  The document reads, “People on this list have their privacy protected.  Keep the lists private.”

ACORN – Citibank Outreach _Redacted_

The reason Wall Street lawyers and board rooms are concerned about ACORN beyond the current political and public relations drawbacks, ACORN’s actions of throwing sensitive private information into a public dumpster containing bank customer records begs the question, is a class action lawsuit in the offing?  One document obtained by shows Citibank customers names, addresses and mortgage loan numbers were illegally disclosed, not to mention the very fact that these individuals are on this list reveals their credit worthiness since they are in a default status with regards to paying their mortgage loans.

ACORN – Citibank Customer _Redacted_

Wall Street certainly has enough to worry about with a weak U.S. economy and uncertainty in global financial markets.  But thanks to ACORN, there is now more to worry about.  Citibank’s cavalier treatment of its customers sensitive, personal and financial information is potentially a serious breach of state and federal law. As the depth of the San Diego ACORN office data breach becomes more clear, Citigroup and possibly more banks, will have to prepare for the inevitable onslaught of low-income homeowners lining up to take advantage of what is truly to be a cash bonanza for the poor.  Be assured that there will be many law firms willing to help “spread the wealth” to these economically disadvantaged individuals whose personal information was treated with careless disregard.