It is hard enough for black businesses to get loans from major lenders – and when Chase bank, the largest in the country, can play dirty, that doesn’t bode well for the thousands of Americans who rely on them. Chase has been caught refusing payments from a borrower and tacking on penalties as part of an unwarranted default.
It has only been a few months since the Chairman of Wells Fargo was forced to resign amid major scandals, and the federal regulators have put major constraints on the bank to clean up the issues. The scary part is that Wells Fargo is not an isolated issue – big banks continue to wield significant lobbying power despite less than savory practices.
It is likely that Chase Bank holds almost 0% of the loans to black businesses in San Francisco. They might only meet a small fraction because Ms. Anne Kihagi, a black businesswoman, borrowed from Chase over the years. Never having any problem, she assumed that Chase would continue to act according to its contractual obligations, as it had for years. Each month, Chase was paid by automatic withdrawal, on time and without fail.
Then, in March 2018, Chase suddenly stopped accepting her payments. Strangely, Chase could give no reason for refusing to accept payment. However, three months later, they made up some form of default and demanded they be fully paid off.
Firstly, this is a violation of Ms. Kihagi’s mortgage agreement, which requires notice and reasonable time to remedy the situation. In this case, Chase was grasping at straws, and the story was different on each call, except for one thing: they wanted all their money, and they wanted it now.
Ms. Kihagi was being forced to pay off a loan that was secured when rates were almost 1.5% lower – there was her answer for why Chase refused to accept her payments. It was the perfect time to use one of the top tricks that big banks rely on all the time: rack up a bigger bill or bide time until it happens on its own.
Ms. Kihagi has been willing to pay the original value demanded, but not the penalties incurred by the bank’s fictional default – which includes a default rate of almost 18% when she never even missed a payment.
Now Chase is citing a potential, future violation as the reason for their abrupt and absurd actions, but this still violates California Civil Code 2924. No bank can issue any notice of default or procure one while they are part of creating the default due to their failure in processing payment.
As a successful businessowner, Ms. Kihagi had hoped that Chase would be reasonable, despite their lack of support for black businesses. But Chase has disappointed her again and again, refusing to respond to her and hiding behind attorneys who continue the charade of justification for halting her payments.
Fortunately, the California Code 2924 is clear: any homeowner should be able to reinstate their loan by paying the outstanding amount claimed. Technical defaults are merely tricks used by banks and only selectively enforced, as only courts can resolve them.
In Wells Fargo’s case, “The Federal Reserve has forbidden the bank from growing any larger until it improves its ability to manage and communicate…” Chase deserves at least the same federal supervision for its rogue actions against a punctual and responsible black businesswoman. If Chase is doing this to Ms. Kihagi, how many others are they tricking? If there are no repercussions for this kind of abuse, how will it ever end?
For information on Anna Kihagi please go to @annekihagi1, http://annekihagisf.com/