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Working Families, Merchants Send Joint Message to Lawmakers: Stop Credit Card Abuses Now- July 15, 2008 

 Workers and Consumers Nationwide Protest WaMu’s ‘Toxic’ Banking Fees, Poor Record on Foreclosures —July 9, 2008

 Seattle-Area Residents, Workers Protest Capital Injection into WaMu Led by Buy-Out Firm TPG, Call Deal Risky for Consumers, Taxpayers, and the Economy —June 24, 2008

 New Information Raises Concerns that TPG-led Investment Could Pose Unacceptable Risks to Consumers, Taxpayers, and Shareholders —June 17, 2008

WASHINGTON MUTUAL SEPARATION OF CEO, CHAIR: STATEMENT OF SEIU MASTER TRUST, FILER OF THE SHAREHOLDER RESOLUTION THAT RESULTED IN ACTION TODAY —June 2, 2008 

Working Families, Merchants Send Joint Message to Lawmakers: Stop Credit Card Abuses Now

Washington, D.C. – July 15, 2008 – In a groundbreaking joint effort by the nation’s fastest growing union and trade associations representing merchants, the Service Employees International Union (SEIU), Food Marketing Institute (FMI), National Association of Convenience Stores (NACS), and the National Grocers Association (NGA) sent a letter to every Member of the House of Representatives today calling on Congress to stop the nation’s biggest banks and credit card companies from continuing abusive practices which harm American consumers and businesses. The groups jointly urged Congressional action to pass the Credit Cardholders’ Bill of Rights Act of 2008 (H.R. 5244), the Credit Card Fair Fee Act (H.R. 5546 and S. 3086), and the Credit Card Interchange Fees Act of 2008 (H.R. 6248).

“The biggest banks have put working families and the economy on a rollercoaster—but regulators aren’t paying enough attention to make sure it doesn’t go off the track,” said Stephen Lerner, Director of the SEIU Private Equity Project. “Lawmakers and regulators have to act before the fees and bad practices hurting consumers derail the economy altogether.”

“The abuse of American consumers and businesses by credit card companies and big banks needs to end,” said John Motley, Senior Vice President, Government and Public Affairs of FMI. “It is time for Congress to Act.”

“By combining the market power of all of the big banks, the credit card companies have the ability to dictate their terms to everyone,” said Lyle Beckwith, Senior Vice President, Government Relations of NACS. “They abuse businesses – large and small – in just the same ways they abuse individual cardholders. The ever-changing credit card terms and mystery fees hit everyone.”

“Credit card abuse is incredibly frustrating for our members,” said Tom Wenning, Senior Vice President and General Counsel of NGA. “They see how much money is taken out of their businesses in credit card fees and then they see the high rates and fees they get hit with as individual consumers. The credit card companies hit all of us twice – and many people don’t even know it.”

Last year alone, banks made $42 billion in interchange fees. The top 10 banks issued 88 percent of the credit cards and made the vast majority of those fees. The biggest banks in the country have recently come under fire for abusive banking practices such as increasing credit card interest rates, high overdraft and late fees and rising costs of consumer products.

Members of Congress introduced bills that will help protect consumers and retailers from the banks’ and credit card companies’ continued abuses. Rep. Carolyn B. Maloney (D-NY), introduced The Credit Cardholders’ Bill of Rights on February 7, 2008; Rep. John Conyers (D-MI) and Rep. Chris Cannon (R-UT) introduced the Credit Card Fair Fee Act on March 6, 2008; Sen. Richard Durbin (D-IL) and Sen. Christopher Bond (R-MO) introduced the Senate companion to the Credit Card Fair Fee Act on June 5, 2008; and Rep. Peter Welch introduced the Credit Card Interchange Fees Act of 2008 on June 11, 2008.

The text of the letter sent to the House of Representatives follows:

The biggest banks and credit card companies have used the power they wield in the marketplace to push unfair business practices that are costing our members—retailers and working families—tens of billions of dollars each year.

The credit card industry has moved steadily over the last several years to impose more burdensome penalties and fees on cardholders--ratcheting up interest rates as high as 30 percent. At the same time, the industry has dramatically increased credit card interchange fee revenues. All banks charge the same schedule of fees which drives up the costs of nearly everything consumers buy, including necessities such as gasoline and food, and removes the competitive pressure to reduce the fees.

Each year, these banks flood our mailboxes with 9 billion pieces of junk mail promising cheap, easy credit. The banks then make all of us pay for these billions of offers--without us even knowing it—by using part of the more than $40 billion they collect annually in interchange fees. These fees are nominally paid between banks but are actually passed on to merchants and, ultimately, to consumers. These fees are tremendously regressive because credit card industry rules make sure they are hidden in the prices of goods and services so that cash shoppers have to pay for them just like premium rewards credit cardholders.

The federal agencies that are responsible for protecting American consumers from the credit card industry’s worst abuses have failed to use their authority to stop the anticompetitive and deceptive and unfair practices that have become standard in the industry. It is now time for Congress to step in and begin to restore fairness in the financial marketplace for working families and merchants.

With that in mind, we urge you to support three pieces of legislation that would begin to reform this industry. These are:

The Credit Cardholders’ Bill of Rights Act of 2008, H.R. 5244, sponsored by Rep. Carolyn Maloney (D-NY);

The Credit Card Fair Fee Act of 2008, H.R. 5546, sponsored by Reps. John Conyers (D-MI) and Chris Cannon (R-UT) and S. 3086 sponsored by Senators Durbin (D-IL) and Bond (R-MO); and

The Credit Card Interchange Fees Act of 2008, H.R. 6248, sponsored by Rep. Peter Welch (D-VT).

These pieces of legislation are important steps forward in ending the abusive credit card practices that drain billions of dollars from working families and retailers each year. We urge you to support these bills and quickly pass them.

About the Organizations

SEIU

The Service Employees International Union (SEIU) is the fastest-growing labor union in North America, with 1.9 million members. Together with consumer advocacy organizations nationwide, we’re working to hold big banks accountable to working families and our communities.

FMI

Food Marketing Institute (FMI) conducts programs in public affairs, food safety, research, education and industry relations on behalf of its 1,500 member companies - food retailers and wholesalers - in the United States and around the world. FMI's U.S. members operate approximately 26,000 retail food stores and 14,000 pharmacies. Their combined annual sales volume of $680 billion represents three-quarters of all retail food store sales in the United States. FMI's retail membership is composed of large multi-store chains, regional firms and independent supermarkets. Its international membership includes 200 companies from more than 50 countries. FMI's associate members include the supplier partners of its retail and wholesale members.

NACS

NACS, the association for convenience and petroleum retailing, is an international trade association representing more than 2,200 retail and 1,800 supplier member companies. The U.S. convenience store industry, with over 146,000 stores across the country, posted $577.4 billion in total sales in 2007, with $408.9 billion in motor fuels sales.

NGA

N.G.A. is the national trade association representing the retail and wholesale grocers that comprise the independent sector of the food distribution industry. An independent retailer is a privately owned or controlled food retail company operating a variety of formats. Most independent operators are serviced by wholesale distributors, while others may be partially or fully self-distributing. Some are publicly traded but with controlling shares held by the family and others are employee owned. Independents are the true “entrepreneurs” of the grocery industry and dedicated to their customers, associates, and communities. N.G.A. members include retail and wholesale grocers, state grocers associations, as well as manufacturers and service suppliers.

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Workers and Consumers Nationwide Protest WaMu’s ‘Toxic’ Banking Fees, Poor Record on Foreclosures

Protesters in HazMat suits highlight greedy practices by WaMu, private equity giant TPG

New York, NY – July 9, 2008—On the heels of a high-profile capital injection into Washington Mutual (WaMu) led by private equity giant Texas Pacific Group (TPG), workers and consumers in major cities nationwide are participating in a series of actions today focused on the thirft’s harmful banking practices—including high bank fees and credit card rates, deceptive credit card practices, and a record of subprime lending that has resulted in foreclosures for thousands of homeowners. Protesters wearing HazMat suits and carrying signs are calling on WaMu to stop spreading the “greed virus” are holding actions outside WaMu and TPG locations in Ft. Worth, Houston, Los Angeles, Miami, New York City, and San Francisco.

“Working families are being hit the worst by the banking crisis—they’re struggling to pay the growing fees on their bank accounts and credit cards and losing their homes,” said Stephen Lerner, Director of the SEIU Private Equity Project. “Now that TPG has a handle on WaMu, they have a responsibility to clean up the damaging practices that led to the crisis in the first place—instead of spreading the mess with more risky and abusive behavior.”

A $7 billion deal finalized June 24 gave TPG and a select group of investors more than half of WaMu’s outstanding stock shares, ensuring the buy-out firm a significant amount of influence into the nation’s largest thrift institution—and earning TPG $50 million dollars in transaction fees. With TPG’s model of seeking high returns over relatively short time periods, the combination may worsen the banking crisis by encouraging WaMu to continue the abusive banking practices that have driven its profits in recent years, such as hiking interest rates and fees on banks accounts and credit cards and other lending practices disproportionately harming working families.

The nation’s largest thrift institution—19.8 million people and businesses have WaMu bank accounts—WaMu has come under fire for leading the market in risky subprime loans and pay-option adjustable rate mortgages and specifically targeting minorities with subprime loans and higher-cost loans. In 2001, WaMu’s credit card division has also had to pay the largest settlement by a credit card company in history for unfair and deceptive practices and fraud.

TPG is one of the largest and most high-profile private equity firms in the world with a portfolio that includes Burger King, J.Crew, Neiman Marcus, Harrah’s Entertainment, MGM, and Univision, among other companies. An investment vehicle linked to TPG collapsed earlier this year—making it the third such investment vehicle backed by a major private equity firm to implode in recent months. As news of the TPG-led investment in WaMu came to light, the TPG-linked fund heavily invested in highly-leveraged mortgage securities was threatening debt-holders with hundreds of millions of dollars in losses (Source: “TPG-Linked Fund Presses Debtholders,” Wall Street Journal, Randall Smith, April 9, 2008).

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Seattle-Area Residents, Workers Protest Capital Injection into WaMu Led by Buy-Out Firm TPG, Call Deal Risky for Consumers, Taxpayers, and the Economy

SEATTLE – June 24, 2008—With Washington Mutual (WaMu) shareholders set to vote on a $7 billion deal that will give private equity buy-out firm Texas Pacific Group (TPG) and a select group of investors more than half the thrift institution’s stock shares, Seattle-area residents and workers are protesting the deal’s potentially “toxic” impact on consumers and the economy today. Wearing HazMat suits and carrying signs, protesters are calling attention to the deal’s potential to expose consumers, taxpayers, and the economy to unacceptably high levels of risk—including through increased fees, credit card interest rates, and questionable regulatory and business practices.

“This deal partners some of the worst practices by our nation’s largest banking institutions and the titans of the private equity world at the worst possible time for our economy,” said Stephen Lerner, Director of the SEIU Private Equity Project. “Taxpayers, consumers, and shareholders shouldn’t have to pay twice—once for Washington Mutual’s record of harmful banking practices and again for a deal that will encourage risky behavior and more abusive practices in the future.”

A Track Record of Harmful Banking Practices, Private Equity Funds in Jeopardy

An affirmative vote today by shareholders would give TPG and its partners a stake of shares equivalent to 50.2 percent of WaMu’s outstanding shares (Source: “Approve This Deal, or Else,” New York Times, Gretchen Morgenson, June 15, 2008), however the deal raises serious questions about combining a major financial institution with a track record of harmful banking practices with a private equity firm linked with its own share of troubles. For the amount private equity giant TPG received in transaction fees as part of the WaMu deal—$50 million—WaMu could have waived mortgage payments for thousands of mortgage holders currently in foreclosure for eight months, approximately 3,259 struggling homeowners nationally.

As the nation’s largest thrift—19.8 million people and businesses have WaMu bank accounts—WaMu has come under fire for leading the market in risky subprime loans and pay-option adjustable rate mortgages and specifically targeting minorities with subprime loans and higher-cost loans. In addition, WaMu’s credit card division has had to pay more in settlements for unfair and deceptive practices and fraud than any other credit card company in the country.

TPG is one of the largest and most high-profile private equity firms in the world with a portfolio that includes Burger King, J.Crew, Neiman Marcus, Harrah’s Entertainment, MGM, and Univision among other companies. An investment vehicle linked to TPG collapsed earlier this year—making it the third such investment vehicle backed by a major private equity firm to implode in recent months. As news of the TPG-led investment in WaMu came to light, the TPG-linked fund heavily invested in highly-leveraged mortgage securities was threatening debt-holders with hundreds of millions of dollars in losses (Source: “TPG-Linked Fund Presses Debtholders,” Wall Street Journal, Randall Smith, April 9, 2008).

Inadequate Scrutiny by Office of Thrift Supervision

The unprecedented same-day approval of the TPG-led investment into WaMu by the Office of Thrift Supervision (OTS) raises considerable regulatory concerns about the agency’s evaluation of risk to taxpayers, its assessment of TPG’s ability to wield such significant influence over the nation’s largest thrift, and its role as an independent oversight agency. Although the TPG-led deal guarantees the regulatory agency’s budget and power, a competing offer from JPMorgan Chase reported to be under consideration in April when the TPG investment was announced could have cut the OTS budget by as much as 21 percent and threatened the agency’s continued existence.

Last week, SEIU released an analysis raising issues with the TPG-led deal, including future risky behavior and abusive banking practices, unacceptable risk to taxpayers and the national economy, inadequate regulatory scrutiny, lack of transparency, conflicts of interest, and the continuation of banking practices that hurt consumers and taxpayers.

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New Information Raises Concerns that TPG-led Investment Could Pose Unacceptable Risks to Consumers, Taxpayers, and Shareholders

WASHINGTON D.C.— June 17, 2008—Private equity powerhouse Texas Pacific Group (TPG) is leading a $7 billion investment into troubled financial institution Washington Mutual (WaMu) which could drive up financial risks to consumers, taxpayers, and shareholders according to new information released today by the Service Employees International Union (SEIU), the fastest-growing union in North America.

“Combining the worst of big banking with the worst of private equity excess is a recipe for disaster for our economy and working families,” said Stephen Lerner, Director of the SEIU Private Equity Project. “Capital infusions from private equity funds—may very well worsen our country’s banking crisis by encouraging risky behavior and abusive banking practices. The latest TPG-led investment into WaMu has created a path for other private equity firms to follow that raises important questions about consumer protections, risk, and transparency.”

Announced on April 7, 2008, the TPG-led investment of $7 billion into WaMu, the nation’s largest thrift institution, also gave the private equity giant 176 million shares of WaMu stock at a reduced price. An affirmative vote on June 24 by shareholders will give the TPG-led group control of shares representing 50.2 percent of the company’s total shares, (source: “Approve This Deal, or Else.” Gretchen Morgenson. New York Times. June 15, 2008).

An analysis by the SEIU shows major concerns over the TPG-led investment into WaMu, including:

• Encouraging risky behavior and abusive banking practices . Private equity firms’ investment into troubled banks could lead to unfair lending practices, skyrocketing credit card interest rates, and other fees on consumer products in order to produce the high returns such funds seek.

• Unacceptable risk to taxpayers and the national economy . TPG’s recent announcement of a separate $7 billion fund to invest in other major U.S. financial firms and services would create a financial network that is not only too large, but too interconnected to be allowed to fail. Taxpayers could be forced to bailout the private equity giants if deals go bad, which is too costly and threatens to destabilize the economy.

• Inadequate regulatory scrutiny and transparency and conflicts of interest . Although the Office of Thrift Supervision (OTS) is charged with regulating such private equity integration with banks, the TPG, WaMu transaction was approved in an unprecedented single day. Shareholders are raising concerns that this same-day approval cites conflicts of interest given that a competing offer by JPMorgan would have cut the OTS budget and power.

• A track record of poor banking practices that hurt consumers and taxpayers . As one of the nation’s largest financial institutions, WaMu led the market in risky subprime loans and pay-option adjustable rate mortgages well into 2007, and even targeted minorities with its worst banking practices such as subprime loans and higher-cost loans. WaMu’s credit card division has had to pay more in settlements for unfair and deceptive practices and fraud than any other credit card company.

In the first week of June, shareholders stripped WaMu Chief Executive, Kerry Kilinger, of his board chairman role, indicating shareholders’ disappointment in the board’s direction and management of risk for investors. WaMu has faced plummeting stock prices and huge losses set off by the subprime mortgage crisis.

WaMu is the nation’s largest thrift—19.8 million people and businesses have WaMu bank accounts--with more than three times as many deposits as the next largest. In fact, it has more deposits than all but the nation’s five largest commercial banks. WaMu’s network of over 2,200 branches is more than twice as large as Citigroup’s.

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WASHINGTON MUTUAL SEPARATION OF CEO, CHAIR: STATEMENT OF SEIU MASTER TRUST, FILER OF THE SHAREHOLDER RESOLUTION THAT RESULTED IN ACTION TODAY

WASHINGTON, D.C.///June 2, 2008///In the wake of the decision of the board of directors of Washington Mutual (NYSE: WM) today to separate its CEO and board chair positions after the April 2008 vote on a Service Employees International Union (SEIU) Master Trust shareholder resolution calling for such action, the following statement was released by SEIU Master Trust Executive Director Steve Abrecht:

"We are pleased the Board of Directors of Washington Mutual separated the roles of Chairman and CEO in response to our shareholder proposal which received majority vote on April 15th.

We also note the significant changes in leadership among several key committees. We believe this is a clear acknowledgement of important failings by Mr. Killinger and the Board in managing risk to shareholders.

We expect more independent and effective Board oversight moving forward, especially in light of the significant threat to shareholder value posed by the recent capital infusion from private equity firm TPG.”

ABOUT THE SEIU MASTER TRUST

At the time of the April 2008 shareholder resolution filing, the SEIU Master Trust held 13,800 shares of Washington Mutual stock.

The SEIU Master Trust, with total assets of more than $1.9 billion, is an active proponent of sound corporate governance as a vital means to protect and enhance shareholder value.

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