Unions representing hotel and textile workers have created a Web site advocating a boycott of Countrywide Financial Corp.'s banks and financial institutions. Countrywide's not doing enough to help out troubled borrowers, the unions claim, so consumers shouldn't let the lender use their savings to make more loans.
Contributing to Countrywide's deposit base, the unions say, "will potentially help them issue more controversial loans. Tell Countrywide that you won't deposit until it ensures that all subprime borrowers with interest rates that have reset in 2006 or 2007 can keep their homes!"
If Countrywide can be accused of kicking borrowers while they're down, the same might be said of the boycott, depending on your point of view.
Countrywide shifted loan production over to its banking division, Countrywide Bank, in August after turmoil in credit markets made it impossible for it and other lenders to issue short term "commercial paper" debt. Countrywide was able to fund more than 90 percent of its mortgage loans through the bank in October, cutting subprime production to 0.2 percent.
Whatever your feelings about the UNITE HERE union boycott, it's got to feel like a knife in the ribs to Countrywide executives, who have embarked on a do-or-die campaign to build the bank's deposits. The campaign not only averted a run on the bank, but helped boost its assets by 28 percent from a year ago to $106 billion.
Of course, Countrywide's got other, potentially more pressing problems, such as its $1.2 billion third quarter loss, class-action lawsuits by investors including large state pension funds, and allegations by the justice department that the company has been inflating claims against debtors in bankruptcy.