Inner City Press' AIG Watch

                Click here to Search This Site       Click here for Inner City Press front page    ICP has published a (double) book about the AIG-relevant topics of predatory lending, and corporate fraud - click here for sample chapters, here for a map, here for fast ordering and delivery, and here for other ordering informationCBS MarketWatch of April 23, 2004, says the the novel has "some very funny moments," and that the non-fiction mixes "global statistics and first-person accounts."  The Washington Post of March 15, 2004, calls Predatory Bender: America in the Aughts "the first novel about predatory lending;" the London Times of April 15, 2004, "A Novel Approach," said it "has a cast of colorful characters."  The Pittsburgh City Paper says the 100-page afterword makes the "indispensable point that predatory lending is now being aggressively exported to the rest of the globe." Click here for that review; click here to Search This Site  For or with more information, contact us.

Updated August 16, 2010

      ICP / Fair Finance Watch has been concerned about AIG's insurance practices for some time. As reported in the New York Times of July 21, 2001, advocacy led to AIG discontinuing American General's abusive "single premium credit insurance" (in which customers were assessed interest on the premiums). But other predatory practices have continued. To seek action on these, ICP has for example obtained a copy of AIG's American General's Insurance Product Guide, which instructs employees on how to convince customers to accept insurance, by tying it "seamlessly" to the loan. The products are supposed to be separate, with no tying. ICP has now submitted to regulators the pertinent sections of AIG's internal Insurance Product Guide to the regulators; ICP has also for example raised that AIG still does business in Zimbabwe, despite the country being, for example, on the U.S.'s and other countries' human rights sanctions lists. For or with more information, contact us.

Update of August 16, 2010: On AIG's sale of 80% of American General to Fortress -- will AIG still have to file American General's HMDA data? Or is that subject to some sort of “control” test? We aim to find out.

Update of January 18, 2010 - See Inner City Press' "As Obama's Bank Fees Under-Target Citigroup and AIG, Geithner Questioned" here

Update of January 11, 2010: so now for his work at the New York Fed, telling AIG to withhold information from the public, Geithner's on the grill. That's all to the good. But it also reflected on the wider Fed...

Update of March 23, 2009:    Hate to see "we told you so," but... Inner City Press / Fair Finance Watch was on the record that AIG was among the sleaziest of companies all the way back to the 1990s. When Inner City Press filed comments against AIG's acquisition of American General Insurance, AIG responded with threats. AIG hired Ernest Patrikis, the top lawyer of the Federal Reserve Bank of New York, and got its way from Timothy Geithner when he ran the New York Fed.

March 16, 2009

In DC, Officials Defend Bailouts of Citigroup and AIG -- Federal Reserve Still Refuses to Say Whom It Paid

Byline: Matthew Russell Lee of Inner City Press: News Analysis

WASHINGTON, March 13 -- The ongoing bailout of insurer AIG and its counterparties was apologized for but defended by a range of Obama administration officials this week. Treasury Secretary Timothy Geithner, until recently the president of the Federal Reserve Bank of New York and before that at the IMF, said he hated to have to bailout AIG, but "it's systemic."

   His advisor Gene Sperling, a member of President Bill Clinton's economic team, said the Obama administration took office only to find AIG too big to fail, implying that this was entirely attributable to the two terms of George W. Bush. But AIG was allowed to grow without control under Bill Clinton, just as Citigroup was increasingly unsupervised under the tenure at the New York Fed of Timothy Geithner, as CitiFinancial got deeper into predatory lending (click here for Inner City Press reports on that.)

  Friday in the White House Barack Obama met and then faced the Press with Paul Volcker, chairman of the Federal Reserve in the time before Bill Clinton. Volcker rarely used his regulatory powers, at least not to protect consumers from predatory lending. And yet now these are the people, along with Clinton's Treasury Secretary Larry Summers, who are defending massive transfers to Citigroup and AIG, all the while laying blame everywhere except upon themselves.

   Meanwhile, the Fed still refuses to say whom it paid on behalf of AIG, with Geither on March 12 saying Bernanke is still deciding.  Bad instincts...

Update of March 9, 2009: Congress during the debate about bailing out the banks decided that non-US banks should not be getting TARP funds. Now it emerges that of the $50 billion the Feds have given to AIG's counter-parties, Deutsche Bank for example has gotten a full $6 billion. Also receiving hand-outs were HSBC, Royal Bank of Scotland and Societe Generale. Worse, the Federal Reserve is trying to avoid providing a listing of the companies who've gotten the public money, as reiterated by Fed Vice Chair Don Kohn on March 5. This is a new low, to be followed up in DC this week.

Update of February 9, 2009: American International Group has withdrawn its membership from the U.S. Climate Action Partnership, the company said Friday. AIG still stands to gain from the creation of a potential multi-trillion dollar market in insuring climate change policies that could range from protection for potential weather-related incidents to liability for carbon dioxide storage leakage.

Update of November 24, 2008: In October, Fred H. Langhammer, chairman of global affairs of Estee Lauder quit the board of AIG, as it got a $150 billion government bailout. His resignation letter cited the time demands of the AIG board seat. Between Nov. 10 and Nov. 19, the directors conferred three times. Where -- in Biarritz? San Tropez?

Update of October 6, 2008: Still getting sucked up to: "Taiwan's Financial Supervisory Commission said late Sunday the three investment units of American International Group Inc. (AIG) on the island have sound fundamentals, but it will monitor their operations closely. 'The commission will monitor closely the three companies' financial and operation changes, and will take appropriate measures when needed,' the island's top financial regulator said in a statement. AIG said Friday all of its non-insurance businesses are for sale. Outside the U.S., AIG said it wants to keep at least a majority stake in American International Assurance Co., which sells life insurance and retirement products in China, Thailand, South Korea, Australia, New Zealand, Vietnam, Indonesia and India." Has the Fed signed off on this?

September 29, 2008 -- AIG generally was not covered by CRA, but its subprime activities have led to a $75 billion loan from the Federal Reserve, whose chairman Ben Bernanke nevertheless claimed to Inner City Press that  the Fed does not control AIG, despite owning warrants for 79% of its stock, click here for that story.

Update of September 22, 2008: So with its $85 billion bailout of AIG, the Federal Reserve will come to run a predatory lending operation. Click here for some Inner City Press / Fair Finance Watch comments. And see here.  But it goes beyond that -- shouldn't the Fed have to apply to the Office of Thrift Supervision to come to control AIG's savings bank? We'll be raising this issue this week.

Update of July 21, 2008: So why did Richard Holbrooke resign last week from AIG's board? AIG while announcing the resignation, "effective immediately," did not list a reason...

Update of May 14, 2007: AIG, one of the sleaziest yet under-the-radar of the subprime lenders, is this week in the news, taking a charge of $128 million for over-charging borrowers. Ever since AIG bought American General, it has been fleecing borrowers. Now even the Office of Thrift Supervision, which enabled much of it, is requiring that something be done. AIG says that "talks are at an advanced stage."

Update of April 23, 2007: A bankruptcy court judge has set an April 25 hearing to discuss contracts Entergy New Orleans has signed with both the state and an insurer to receive more than $220 million to help the company pay for storm damage it sustained from Hurricane Katrina. Under the state contract, Entergy is to receive a $171 million Community Development Block Grant. The company also has reached a $53 million settlement with Hartford Steam Boiler Inspection and Insurance, a subsidiary of AIG Inc

  Yeah, AIG likes to play cheap in paying on insurance policies it has collected premiums for...

Update of January 22, 2007: From the mailbag this week, we have an intriguing message about AIG's American General unit spying on its borrowers through their credit reports, to pay to prevent payoffs:

Subject: Abuses at American General from an Insider

To: Inner City Press

From: [Name withheld]

Sent: Sat, 20 Jan 2007 12:31 PM

  Are you aware that American General tracks the shopping patterns of its customers thru the credit bureau Experian?

 AG submits its customer info to Experian. Experian then sends a notification to AG when a customer is shopping for loans elsewhere. AG then calls the customer. This is a violation of FCRA issues. One customer in Maryland has already filed suit.

            That sure sounds like AIG...

Update of December 4, 2006: AIG's subprime lender American General Finance is expanding overseas. Last week, AIG announced a plan to purchase Ocean Finance and Mortgages Ltd., a British finance broker for home loans. American General Finance claimed this acquisition marks the first time the company has operations located outside North America. Maybe the first, technically, for American General -- but it's just that American General is now AIG's vehicle for exporting predatory lending...

Update of November 20, 2006: Two AIG units have received subpoenas from the Securities and Exchange Commission and the U.S. Justice Department, an AIG spokesman admitted on Friday.  AIG Financial Products received a subpoena from the Justice Department's anti-trust division and AIG's SunAmerica was hit with a subpoena from the SEC...

Update of October 16, 2006: On AIG's role in the "block box" bond scam: " In the Florida deal, a little-known government body called the Capital Trust Agency turned the work over to its advisers: Anchor National Life Insurance, a subsidiary of AIG; CDR Financial Products, a financial advisory firm in Beverly Hills, California; and the underwriter J.P. Morgan. These companies and other middlemen extracted $12 million in fees from the bond issue; the rest of the money went unused. The AIG unit and CDR had an agreement that the agency said it did not know about. The agreement allowed CDR to increase its fees as long as the money was not spent for its intended purpose, according to a Nov. 18, 1999, letter from CDR's president, David Rubin, to AIG's Anchor National vice president, J. Franklin Grey. The less money that was used to acquire and renovate apartments, the more money CDR stood to make, and the less risk AIG's affiliate faced as an insurer since all of the money stayed in a safe account. 'Black box deals, pooled deals, blind pools - people call them lots of things,' said Sherman Golden, an Atlanta-based bond lawyer, who said that he experienced one of these deals firsthand when he was a municipal official. He said that he has seen too many deals that benefited banks and other promoters at the expense of taxpayers.  AIG spokesman said AIG no longer participated in such transactions. Black box bond deals also rob the U.S. Treasury of about $100 million a year in revenue." -Bloomberg News.

Update of October 9, 2006: From the mailbag:

Subject: AIG's American General Financial

From ;[ ]
To: MLee [at] InnerCityPress.org
Sent: Fri, 6 Oct 2006 8:40 PM
My name is Dr. Randal Christensen, I reside in the state of Utah. I would like to relay an experience I am currently having with AIG's American General Financial. The Office I am referring to is located in the city of Riverdale, Utah. I have a loan through that office. I had to declare bankruptcy back in 2003 due to a accident I had which put me nearly $500,000.00 in debt with medical bills. I was not able to return to my work for over a year. Needless to say it has been a struggle to pay my bills. American General to the rescue NOT  Another victim of this companies predatory lending practices. They provided a loan, "To catch-up my past due bills," as they called it however they needed collateral for the loan. Now after chapter 7 bankruptcy, losing my house, plus everything else I owned, except for a 1994 Pickup which I had the title to. I used that as collateral. pretty scary because that was my only transportation. I had no choice, so I signed the contract with the unbelievable interest rate of 32% this made the payment $372.00 per month. They again tied insurance premiums to the loan with no disclosure. Which I thought was outrageous, I had fallen one payment behind on that loan and they called and left a message they were going to repo my truck. I found a financial advisor who has help me get my bills in order and paying them off. Now the fun begins, during the 6-7 months that I was behind 1 payment. I have been told by the front desk receptionist of the Riverdale Branch office I Quote " I'm a dead beat, a liar, I don't deserve a chance, just about everything you can imagine. I have been left phone messages with the same language on them. Now I was able to get $3000.00 saved up so I went down to their office to pay on the loan. I called and made arrangements with the manager to get my truck title released. He said " for a payment of $3000.00 he would release the title. I did take the money to him on Oct. 2, 2006 and he released my title. Now today Oct 6 2006 I get a call from them saying I am a month behind on my payment. That the $3000 I paid them was just to release the title of the truck and did not count as a payment. I said no I paid you a payment on 2 Oct and the manager said no that wasn't a payment. and that it was company policy to not record it as a payment but a release of collateral. He said "it was his branch and he would run it how he wanted, so I was still a payment behind " I still owe $2700.00 on the original loan. I have reported the Manager of the Branch and the front desk receptionist to the district manager who is Bill Kishton of South Jordan Utah, he did nothing then I reported the events to Russell Barrett of Westminster Colorado the Division Manager he does no thing so now I am going on up the food chain to a Matt Mitchel of Tempe Arizona who is Western region Manager. I am sure I will get the same results. NOTHING, NADA, just more B S. Just another example of how this company does business and treats people. They need to be stopped. I think the work y'all are doing is great. You have my permission to print all or any of this.

            When AIG bought American General, they said it wasn't predatory...For or with more information, contact us.

Update of October 2, 2006: AIG has applied to the Bank of Thailand for a banking license by the end of this year, after it sent the central bank the information it requested regarding allegations of accounting fraud by AIG. "Last week, we turned in the required information to the central bank. I think at this time we have submitted all [requested] information," AIG Consumer Finance Group country manager Chaiwat Utaiwan told reporters. Sure, let a fraudster into banking...

Update of May 15, 2006:  At one of AIG's stealth subprime lenders, Wilmington Finance (which has so far refused to provide its 2005 HMDA data in analyzable form), the CEO has quietly left." A receptionist at the company had no information on Mr. Schiano and said that the new CEO is George Roach." (NMN).  Ah, AIG, and its approach to transparency...

Update of April 10, 2006:  The 2005 Home Mortgage Disclosure Act data, which Inner City Press / Fair Finance Watch received in late March from numerous lenders, were received from AIG only in non-analyzable PDF format. ICP sent the following, as yet not responded to:

From: fairfinancewatch.org

 To: Robert.Rossiter@aig.com; ernest.patrikis@aig.com

Sent: Mon, 3 Apr 2006 13:34:39 -0400

Subject: Reiterating ICP's 2/27 request for all of AIG's 2005 HDMA-LAR in .dat format

 Mr. Rossiter, et al. --

 This concerns the formal request for all of AIG's 2005 HMDA-LARs, in the .dat format in which they are provided to regulators, which Inner City Press / Fair Finance Watch directed to the attention of yourself and others at AIG on February 27. Our request noted that last year AIG unlike nearly all of its peers refused to provide its data in the .dat format, but only unanalyzable PDF. Subsequently, you provided the data of AIG FSB in .dat format, while the American General subprime units persisted in providing only unanalyzable PDF. The request urged that AIG and its American General affiliates follow their peers, and act within the spirit of the HMDA regulation, to provide the data in a useful format.

 We are troubled that you have nevertheless insisted on providing even AIG FSB's 2005 data only in .PDF format. This seems to us to be calculated to evade review by community, consumers and civil rights groups, particularly inappropriate given the large and expanding size of AIG's subprime lending business (and AIG FSB's status as an insured institution covered by CRA). We have already received numerous non-bank or -thrift affiliated subprime lenders' 2005 HMDA-LAR in .dat format. We urge you to forthwith provide the data in .dat format, as specified in our Feb. 27 formal request. Please advise immediately, thank you.

--Inner City Press / Fair Finance Watch

For or with more information, contact us.

Update of March 27, 2006:  AIG's American General Finance Corp. said in a Form 8-K filed March 24 that it will restate its unaudited condensed consolidated financial statements and other financial information at and for the quarters ended March 31, June 30, and Sept. 30, 2005. AIG said that the restatement relates to the correction of errors in its accounting for four cross-currency swaps designated as hedges of its foreign currency denominated debt" -- American General's non-US subprime consumer finance? We'll see.

Update of February 20, 2006And still they keep on buying: Dow Jones of February 17 reported from Taipei that American International Group Inc. proposes to acquire Taiwan's Central Insurance Co., “AIG plans to complete the transaction within 30 days after shareholders of Central Insurance approve the deal.” There was no mention of (the) required regulatory approval…

Update of February 13, 2006: The sickest irony of the Feb. 9 settlement, as gleefully recounted in the Feb. 10 WSJ: "American International Group's size makes the twin hits lighter than they would be for most insurers -- profit neared $11.5 billion in the year ended Sept. 30. In 4 p.m. composite trading yesterday on the New York Stock Exchange, AIG's shares were up 74 cents to $67.12... AIG is in a position to benefit because people are getting wealthier in developing markets, but also from people spending an increasing percentage of their mounting wealth on insurance, which is seen as a safe investment. Investors and analysts have long been bullish on those operations and that feeling didn't exit with Mr. Greenberg, who still has eyes on some of AIG's turf through two private-equity funds he still controls." And those who still control AIG directly are not uninvolved in the practices described below in this Report. To be continued...

Update of January 23, 2006:  AIG has named to its board of director ex-Citigroup Bob Willumstad, who falsely claimed at the April 2005 Citigroup shareholders meeting that Citigroup had not made super-high-cost HOEPA loans. AIG’s press release states that “Mr. Willumstad, 60… joined CitiFinancial (then Commercial Credit, a predecessor company) in 1987.” Yep – he was in subprime consumer finance for a long time – and now still is. AIG also does subprime lending through its ex-American General units….

Update of August 22, 2005:  From the mailbag:

Subj: American General Finance Company/Predatory Lenders!

Date: 8/20/2005 5:17:44 AM Eastern Standard Time

From: [ ]

To: AIG-watch [at] innercitypress.org

How much longer will it be, before American General Finance Company is put to a stop on predatory lending? This has been my nightmare with them.

My husband and I are victims of predatory lending.  American General Finance Company encouraged us to refinance our home through them.  They assured us that this was the right thing for us to do, and the best thing that we could do. They promised us that our interest rate would remain about the same, about 9-10% at the most, and the payments would stay around the same, around $450-500 at the most. They did not tell us that the loan was a revolving credit loan, like a credit card, so that we’d never pay the house off.  Everything happened so fast, at the closing.  After signing the papers, we found out that we had singed to a 14.50% interest rate and almost $750 monthly payment.  They also did not inform us that we had three days to look at the contract. This loan has caused us to almost lose our home of 25 years.  They foreclosed on us and I immediately filed for bankruptcy.  The original loan amount was $56,000.  With all the interests, fines, fees, and costs for their lawyer fees and whatever else they charged us for, we now owe them $72,000 for our home!  So even though we have filed for bankruptcy, we are still threatened by the possibility of being foreclosed on again.  From month to month, it’s almost impossible for us to make our house payment, now being $750 and if we’re late almost $800.  I know for a fact that they are just waiting on us to default so that they could take our home away from us!  In the last three years we have paid them over $35,000, and we now owe them $72,000, there’s a serious problem with this!  This is robbery!!!   I personally know someone else who has experienced a similar problem with them, and they too were forced to file for bankruptcy.   On the day my house went up for sale at the courthouse, there were two other families that AG foreclosed on.   One day, while I was making a payment at the office, another customer was there making a mortgage payment too.  They were there to make a payment so that they could get ahead on a payment.  They told him that was impossible for him to do, because the computer would not allow them to do that.  Well, I had the same experience with them.  I made two payments in one month, thinking that I was going to be a payment ahead.  The next month it was as though I had never made an extra payment, it went towards the interests. You can imagine how I felt, furious!!!    Several times they tried to get me to redo the loan with them so that they could catch me up, but I refused.  Instead I tried to redo the loan with other finance companies, and when I did, they made it hard for me to accomplish that.  I then found out that there was a prepayment fine or penalty fee of  $4,000, along with other fines and fees they were charging me, making it impossible for me to get out from underneath them. They have me trapped!!!    If it continues like this, sooner or later they will have my home.  And they know it too!!!  And others too!!!   American General Finance Company preys on minorities and the low- income people. They must be put to a STOP!!! PLEASE DO AN INVESTIAGATION ON THEM.

Okay... For or with more information, contact us.

Update of July 18, 2005: Last week AIG announced it will sell a gas pipeline to GE. It’s the Southern Star pipeline system, through Kansas, Oklahoma, Missouri, Wyoming, Nebraska, Colorado and Texas; it is being sold for $362 million, by AIG Highstar...

Update of April 18, 2005: Inner City Press / Fair Finance Watch is reviewing the 2004 Home Mortgage Disclosure Act data of  AIG FSB including the new information concerning which loans are subject to a rate spread (3% higher than comparable Treasuries on a first lien, and 5% on a subordinated lien), and has found that AIG FSB in 2004 imposed higher-cost rate spread loans 2.27 times more frequently on African Americans than on whites in its home state of Delaware. AIG’s four American General subsidiaries are still refusing to provide their data in the same format as (now) AIG FSB, and virtually all other lenders. Developing... 

Update of April 4, 2005: This week it’s logistic. On February 28, ICP Fair Finance Watch made a formal request for AIG’s (and American General’s) 2004 mortgage lending data; the data by regulation must be provided “by March 31 for a request received on or before March 1.” ICP’s request was directed to the signer of AIG’s previous responses to ICP’s regulatory comments. AIG waited the full month, then on March 31 provided its data on five separate compact disks, one in unanalyzable PDF format, the others in a “read-only” format that resists importing into analysis software. AIG knows this; ICP has complained to AIG (re-requesting that the data be “provided in a single .DAT file, allowing analysis of the entire conglomerate’s patterns at one time”) and, having received no further response (or data) from AIG, now to the regulators as well. Click here to view the first of ICP’s studies (including of AIG’s peer, Citigroup);  AIG / American General will be in a future study, watch this space.

Update of March 15, 2005: Too little, too late? The ouster of Maurice “Hank” Greenberg, confirmed on a conference call today, does not resolve the numerous issues which swirl around AIG, which also include questionable subprime lending practices at AIG’s American General units, and standardless international business.  As simply one example, which ICP's Human Rights Enforcement project / Rights Force has raised directly to AIG, it continues its business in Zimbabwe, see, e.g., www.aig.com/gateway/country/1/70/0/0/79/Zimbabwe.htm.  We’ll have more on all this going forward.

Some previous reports:

Update of November 29, 2004:  Beyond the $126 million SEC settlement last week, now it’s reported that Hank Greenberg is “being looked at” for inflating AIG’s stock price during the take-over of American General. Per the WSJ, the criminal inquiry is premised on Greenberg having called the office of Richard Grasso, then the before-the-fall chairman of the New York Stock Exchange, to ask him for help in propping up AIG's share price, to keep AIG from having to issue more stock to pay for American General. Though Grasso was out of the office that day, traders who worked for Goldman Sachs unit Spear, Leeds & Kellogg ultimately bought up the AIG shares... For or with more information, contact us.

Update of October 25, 2004:  Call it meltdown -- or a threat to go fully offshore. On October 21, AIG's Hank Greenberg reacted to the news that this company is the subject of a grand jury probe by complaining, "We do business all over the world and the place we are having the most problems is right here in the U.S. We are the same company that we always have been."  Masters of account smoothing, and since buying American General, of predatory lending too...

Update of October 18, 2004:  From last week’s insurance scandal revelations, in the case where ACE increased its bid for casualty insurance for Fortune Brands by $110,000 to $1.1 million, just to satisfy Marsh. Marsh "requested we increase premium to be less competitive, so AIG does not [lose] the business," an ACE exec wrote in an e-mail.  As we’ve said, predatory is not confined to AIG’s consumer finance business...

Update of October 11, 2004: AIG said it was under investigation for certain deals, "including three transactions" with PNC -- but failed to mention that the investigations also covered five additional deals with two other insurers.  BW quotes current and former law enforcement sources say they're taking a tough stance with AIG because they believe it plays "hide the ball" by allegedly resisting requests for documents, e-mails, and other information from SEC and Justice staff. And when it's required to disclose investigations, they add, AIG downplays their seriousness in public statements.  Just like its approach to AIG American General’s predatory lending...

From the NYT of Oct. 7: “Mr. Ransom of Fox-Pitt, Kelton said he arranged a conference call with other analysts who follow A.I.G. yesterday because its stock '’was getting beaten up, and I thought this was grossly overdone.' In the call, Mr. Ransom said of the dispute between the company and regulators: 'A.I.G. reacts to these things depending on whether they think they have done something wrong. And I think in the present case, they don't think they have done anything wrong.' Joe Norton, a spokesman for A.I.G. confirmed that Mr. Greenberg spoke with Mr. Ransom and said he had no reason to believe Mr. Greenberg had not been quoted accurately.”

  ICP’s question: how does this comply with the SEC’s Regulation Fair Disclosure?

Update of September 27, 2004: AIG disclosed last week that it has received a Wells notice indicating that the SEC is considering a civil action against AIG and one of its subsidiaries for their dealings with PNC. AIG said in a press release that they "believe the proposed action would be unwarranted and will respond to the staff." A spokesman for AIG declined to provide further comment, and a spokesman for PNC would not comment.  What transparency! AIG paid $10 million in September a year ago to settle SEC charges that the insurer helped telephone distributor Brightpoint Inc. hide losses with a fraudulent insurance policy....

Update of September 13, 2004: From the mailbag:

Subj: Question about predatory lending by American General 

Date: 9/10/2004 11:23:35 PM Eastern Standard Time

From: [Name withheld in this format]

To: AIG-Watch [at] innercitypress.org

 My mother has a loan from American General Financing in North Idaho and it is classic predatory lending... We also have the insurance from them with her 23% interest loan. In fact there are two and one has a $720.00 check with a poorly forged signature. She didn't even know about it until last week when I made her get copies of her loan with her signature on them. AG had only given her a few of her loan papers and none with the check or stating that she had two insurance polices from them until we demanded these copies. An attorney has agreed to look at her loan next week but AG has told her they are going to take her home and her vehicle (used on the loan) by the end of the month. Any advise or help you can offer will be a huge blessing. We are a little lost in all of this.   Thank you for your site [etc.]

Keep us posted! For or with more information, contact us.

Update of August 23, 2004: From the mailbag:

Subj: American General Finance Insurance Problem

Date: 8/15/2004 10:54:15 PM Eastern Standard Time

From: [NAME WITHHELD IN THIS FORMAT]

To: AIG-Watch [at] innercitypress.org

Hello! I have had loans with American General Finance since 1998. My car had been the collateral. I was in severe financial straits due to a failing business, and I accepted three offers to refinance my loan (each adding at least $300 in fees alone to the amount of the loan, practice I understand is called "loan flipping"). I admit to lacking financial sophistication. However, before accepting the third and final refinancing I expressed concern that the amount of the loan might then exceed the value of the car, hence if I were in an accident and totaled my car the insurance would not cover it. I was assured at that time that the insurance would indeed cover the amount of the loan. I accepted this statement based on trust. In February 2003 my car was indeed totaled, and at that time my coverage was the insurance supplied by American General. It in fact did not cover the loan; in fact, the insurance only covered approximately $3200, leaving a balance of approximately $5800. Since I needed a car for my work, I had no choice but to buy a replacement car, and it became difficult to carry both payments. Now, I am being sued by American General for the balance of the loan at $5500... The contract I signed allows for damages not exceeding $5000, including attorneys fees and all costs, but they are suing me for $5500...

Raise it -- document it and raise it. And keep us posted. For or with more information, contact us.

Update of August 16, 2004: From the Financial Times of August 12, "Maurice Greenberg at insurer AIG, for example, joked that he had two jobs: working through the governance issues during the day and running the company at night." Yep -- off the books...

Update of July 26, 2004: Specifically on AIG’s export of subprime consumer finance, The Nation (Thailand) of July 19 reported that "AIG Finance (Thailand) is a consumer finance company majority-owned by AIG Consumer Finance, a subsidiary of American International Group Inc. The company concentrates on providing hire purchases, personal loans and promissory note services." Hey, that’s American General Finance’s business in the U.S...

Nothin’ but business: last week Hank Greenberg gave a rosy picture of AIG’s global profits and prospects -- including its exploitation of World Trade Organization rules -- and its political focus at home: "In Japan the improving economy has contributed to our growth, especially in the growing commercial lines business and personal accident operations. The UK, European and Australasian regions had excellent results. Latin America has had another good quarter, too. In China our landmark venture with PICC Property & Casualty to develop the market for accident and health products is up and running. Also, we expect by the end of 2004 to extend our general insurance operations to more cities in China as the market opens up in compliance with World Trade Organization rules." Greenberg-the-patriot also said: "Reforming the US tort system is more than an insurance industry issue. It is critical to the economy and the country. Necessary class-action reforms had significant support in Congress, and it is unfortunate that debate over the number of non-germane amendments attached to the bill led to what we hope is a temporary setback. Efforts are under way to reconcile these differences and the bill could be reintroduced at a later date. We will continue to work for its passage." Work and pay, that is. AIG’s political contribution usually pan out though, even to the extent of AIG being granted special rights during China’s entry into the WTO...

Greenberg also noted that a recent proposal in India's Parliament to allow foreign insurance companies to increase their ownership to 49% from 26%, which, if passed, would "present a significant opportunity for us to enhance our presence in this attractive market, where our life and general insurance joint ventures have had rapid growth throughout the country." For or with more information, contact us.

Update of July 19, 2004: AIG and power plants, from a (dense) July 13 press release: "AIG Global Investment Group (AIGGIG) announced today that Northern Star Generation, LLC (Northern Star) has acquired four power plants from El Paso Merchant Energy (EPME), a unit of El Paso Corp., for approximately $226.4 million and the assumption of approximately $39 million in consolidated non-recourse debt. Northern Star is owned equally by AIG Highstar Generation LLC... AIG Highstar Generation LLC is owned by AIG Highstar Capital II, L.P. (Highstar II) and other co-investors. Highstar II is a private equity fund sponsored by AIGGIG. AIG Financial Products Corp. (AIG-FP) provided the acquisition financing and worked closely with Northern Star in evaluating the projects and negotiating the acquisition terms. Additionally, in its role as exclusive restructuring agent, AIG-FP will use its expertise to restructure certain assets in an effort to optimize the return of the portfolio. The four power plants, located in Massachusetts, Pennsylvania, Florida and Nevada, are the first to be acquired of up to 25 power plants that Northern Star agreed to purchase from EPME for up to $746 million." AIG's environmental standards will, one would think, be closer scrutinized as time goes by.

Update of July 12, 2004: American International Group, Inc. (AIG) will report its second quarter 2004 earnings on Thursday, July 22, 2004. On that date, AIG Chairman Hank ("Just Hank") Greenberg will host a conference call, broadcast over the Internet, at 9:00 a.m. EDT....

Update of June 7, 2004: From a first-hand account of AIG's annual meeting, generously provided by an attendee: the business meeting was over in less than half an hour, followed by speeches by Hank Greenberg and six others, on significant growth opportunities in things like terror insurance, insuring companies doing business in Iraq, workplace violence insurance and SARS coverage. They trumpeted opportunities for class action reform, mourned the crumbling of a proposed asbestos settlement. American General's new markets to low income borrowers were heralded as a growth area. But without anti-predatory lending safeguards: the shareholders' resolution on the topic was opposed by management and roundly voted down. The Titanic lurches on, with no rudder but greed...

Update of June 1, 2004: From the prime minister of (troubled) Georgia, Zurab Zhvania: "I would simply remind journalists about the visit to Georgia by top US businessmen about a month ago. It was a group of about 12 very rich businessmen, super-millionaires, as they are sometimes referred to. I could name Mr (Maurice) Greenberg, president (chairman) of the world's number one insurance group, AIG. Since his visit to Tbilisi, I have met him in New York. He confirmed his desire to open a branch of his insurance group in Georgia. He is seriously interested in Georgia." Hey, Hank Greenberg and AIG are in Zimbabwe, too...

Update of May 24, 2004: AIG, the company that clung to an insider-heavy board of directors, and tried most recently to get a shareholders' resolution about its predatory lending knocked off the proxy (apparently using the argument that predatory lending is a part of AIG's "ordinary business") - anyway, now AIG's mausoleum king, Hammered Hank Greenberg, is speechifying against corporate transparency. Of the bipartisan Sarbanes-Oxley bill, Greenberg complained last week that "Some of us have two jobs - the regulatory burden during the day and running the company at night." He also promised (or threatened) that "We're on the hunt," Greenberg said at the company's annual shareholder meeting. "There will be continued consolidation in our industry, both domestic and foreign. We will not overlook that opportunity." Those deals must be done at midnight, since the entire day is spent complying with Sarbanes-Oxley... 

Update of May 17, 2004: in the run-up to this week's AIG annual shareholders' meeting, at which a proposal is in the proxy statement that would require AIG's board of directors to "conduct a special executive compensation review to study ways of linking executive compensation to successfully addressing predatory lending practices." AIG tried to get the proposal kept out of the proxy, contesting it at the SEC (where AIG lost); now, AIG has urged a "no" vote, stating that "AIG’s subsidiaries, through their legal and compliance departments, have developed internal procedures and lending policies to ensure compliance with applicable laws both in the United States and abroad." ICP note: the "abroad" part is particularly laughable -- AIG lags even its peers inside the U.S., and has no safeguards beyond the U.S...

Update of May 3, 2004: in the run-up to AIG's annual meeting, reports resurfaced last week that AIG "insured Boston's Big Dig, a multibillion-dollar tunnel and highway that cut a path across the city. In the process, AIG pocketed $150 million in federal funds. When Sen. John McCain [R-Ariz.], chairman of the Senate Commerce, Science and Transportation Committee, moved for action against AIG, Kerry pleaded to protect the insurer and got McCain to call off punitive legislation. After which, our hero's Citizen Soldier Political Action Committee received $30,000 from AIG for his Senate campaign, and AIG executives contributed another $18,000 directly to Kerry's Senate and presidential campaigns. " Pay to play -- by a still-predatory lender...

Update of April 26, 2004: Last week, ICP attended and raised predatory lending issues at Citigroup's annual shareholders' meeting (click here to view ICP's report). Similar question are on the agenda for AIG's annual meeting, including in the form of a shareholders' resolution that would link, at least loosely, addressing (and stopping!) American General Finance's predatory lending with executive compensation. Hank Greenberg raked in $29.7 million. According to Business Week, " Though Greenberg doesn't participate in AIG's supplementary bonus program, the board gave him a $ 6.5 million bonus anyway." There are many definitions of predatory... We will have more on this. For a CBS MarketWatch article on these (predatory lending) issues, click here.

Update of April 19, 2004: the buzzword corporate governance is an afterthought at AIG. SEC filings earlier this month show that AIG in the past two years has given the IRS $3.5 million more than they would otherwise have received because it had not put Hammered Hank Greenberg's bonus plan to a vote of the shareholders. Tax regulations provide that a company's pay to its chief executive over the first Dollars 1m is not tax-deductible unless it meets certain performance-related criteria and is pre-approved by shareholders. Since 2001, Hank's been off-road: the $5 million bonus Greenberg grabbed in 2002 and 2003's $6.5 million were not tax-deductible. AIG declined to comment on why it had not put a new plan up for shareholder approval until this year...

Update of April 12, 2004: AIG is a predatory lender that flies below the radar. A recent example is the lack of reporting on AIG's American General's robbing of consumers in New Jersey. All too rare, the NJ Department of Banking and Insurance took action, and ahs ordered at least $1.2 million in restitution by AIG to more than 700 NJ consumers. The Department of Banking and Insurance explicitly found that the homeowners had been overcharged on their home equity loans from AIG's American General -- they were charged points significantly in excess of the amount indicated on their pre-disclosure forms. Such bait-and-switch is called predatory lending, and its among the things (along with obfuscating advertisements) that AIG knows...

Update of March 29, 2004: Among AIG's predatory lending storefronts is an office of American General Finance in a strip mall in New York's Broome County, at 1901-1905 Vestal Parkway East... Meanwhile, AIG EVP Jay Wintrob will shoot the breeze at UBS on March 29 at 6:00 p.m. - it'll be here -- event.streamx.us/event/default.asp?event=UBS20040330

Update of March 22, 2004: The second string, unplugged: AIG vice chair Martin J. Sullivan and CFO Howard I. Smith will be talkin' trash at the Banc of America Securities' "Financial Services: Unscripted" Conference on Tuesday, March 23, 2004 at 8 a.m., www.veracast.com/webcasts/bas/financial-services-2004/ id09101178.cfm

Update of March 15, 2004: AIG and tax avoidance (a/k/a tax evasion), from the intrepid Rob Wells of DJNS: "Senate Finance Chairman Charles Grassley, R-Iowa, and the panel's top Democrat, Sen. Max Baucus, D-Mont., alerted leaders on the Senate Budget and Appropriations committees about the potential financial damage of leasing tax shelters.... Grassley and Baucus released a list of investors, lawyers, lenders and appraisers involved in the leasing transactions with transit systems, a virtual "Who's Who" in the corporate financing community. The list names investors such as First Union Commercial Corp., a unit of Wachovia Corp. (WB), and lenders such as AIG Financial Products Corp. (AIG). . An AIG spokesman had no immediate comment." Yeah, right... 

Update of March 8, 2004: old AIG -- and we mean, old -- has scheduled its annual shareholders' meeting for May 19, 2004. Along with questions about AIG's predatory "growing global consumer finance business," last week AIG bragged that its "Private Client Group" will "provide policyholders employing domestic staff with access to background investigations" - by Kroll, no less. According to AIG's press release, "Policyholders have the ability to screen all of their U.S.-based employees, such as their nanny, housekeeper, driver, gardener, chef, or home health worker" -- including checking for "complete employment history and professional licensure." Yep - those forged gardening licenses are a real problem... 

Update of March 1, 2004: AIG and privatization: last week AIG announced it will invest close to $10 million in Hungarian shipping firm Volan Tefu Rt, whose chairman says "That presents us with great growth opportunities...we're looking mostly at privatization deals in the Ukraine, Poland, the Czech Republic, Slovakia and Slovenia." AIG will have two seats on the board...

Update of February 23, 2004: Hammered Hank the subprime lender will speak at the Merrill Lynch Insurance Investor Conference on Monday, February 23, 2004 at 9:05 a.m. ; AIG "note[s] that Mr. Greenberg's remarks may contain forward-looking statements." We'll see...

Update of February 16, 2004: AIG begrudgingly committed to drop single premium insurance in connection with the subprime lending business it was acquiring, in the face of Inner City Press / Fair Finance Watch's protests, from American General in 2001. The commitment, made in letters to regulators, was reported in the New York Times (July 21, 2001), and in the American Banker of July 23, 2001: "AmGen to End Single-Premium Insurance.. to counter criticism from Inner City Press."

  Now, Inner City Press has obtained a letter, from AIG's "Merit Life Insurance Company" of Evansville, Indiana (also the headquarters of American General Finance) stating, "Enclosed is your new single premium accidental death and dismemberment insurance policy." The letter is cc-ed to Judith A. Henley, 8079 Kingston Pike, Knoxville, Tennessee. Ms. Henley works at a branch of AIG's American General Finance; ICP has also obtained Ms.Henley's (and other American General Finance employees') "Merit Life Commission Statement." [Ms. Henley is Employee Number 2086663; her AGF branch colleagues are Chris S. Outland, Steven F. Kopman, and Martha B. Watkins.] These commission statements reflect that, for AIG, American General Finance storefronts are a selling place for single premium insurance -- in a sense, that loans are an excuse for selling high-cost insurance. For shame... 

Update of February 9, 2004: Following-up, from the mail bag:

Subj: American General Finance

Date: 2/2/04 9:16:45 PM Eastern Standard Time

From: [Name withheld upon request]

To: AIG-Watch [at] innercitypress.org

1. In response to the former employee email you received, she can probably forget about the employee handbook. They are well guarded.

2. While working for AGF, I was given a "Needs Improvement" on my review because my INSURANCE SALES did not measure up to what was expected of me. I was

actually told by a VP that I would be an excellent witness for AGF in the Insurance suit going on because my figured proved I didn't believe in the products.

3. When former customers requested copies of documents, we were told to inform them there was a charge for copies, and that was only IF we still had their file. A lot of times, we were told to tell them files were kept off site.

4. As far as leaving AGF, it was quit or be committed. I have never worked for a company that so consistently told you that you were terrible at your job.

Keep that mail coming! Meanwhile, in the litigation seeking to overturn Toledo, Ohio's anti-predatory lending ordinance, an executive of American General, which has three Toledo offices, said that the firm will stop making mortgage loans in Toledo if the law is upheld. "American General -- will face potential criminal liability for having, in good faith, interpreted in a manner different than Toledo's officials certain vague terms in the Toledo ordinance such as 'unconscionable' and 'materially detrimental,'" said Michael McClellan, senior operations director at AIG....

Update of February 2, 2004: From the mailbag:

Subj: aig/american general /ins/predatory lending

Date: 1/29/04 9:10:34 PM Eastern Standard Time

To: AIG-Watch [at] innercitypress.org

i was informed of your site about a week ago, while looking for an employee handbook from american general finance. i am amazed at the extensive research you have done on predatory lending and my former company american general finance. for your information :

american general loves to harass employees into selling credit insurance products, my district manager sent out an email ridiculing me for my non productive insurance sales, this was 30 min after being served with papers for the class action law suit that has taken over this state(ms). as far as predatory lending, too much weight is given in the local branches, most managers do not have the knowledge to make the kind of loans they make which leaves agf wide open for mistakes. they are a powerful company and once they have decided they don't need you any more, you better get ready. i am in the process of filing suit

   Keep us posted!

Update of January 26, 2004: Hank and hawala: AIG announced last week that it will offer policies of $10,000 of accidental death and dismemberment coverage to U.S.-based remittance customers of the National Bank of Pakistan. The press spin recites that more than 700,000 Pakistani nationals live and work in the United States. Together, they control about $250 billion of assets; individuals remit $300 to $500 per month abroad. Those who remit funds for distribution overseas through the National Bank of Pakistan will automatically get the insurance at no additional cost; the bank is to pay the premiums. Coverage is to be given for 12 months from the first remittance, and only one transaction is required to become eligible. The coverage is available to anyone using the bank's branches in New York or Washington. Hank (Greenberg) and hawala...

Update of January 20, 2004: AIG, buyer of power plants. On January 16, El Paso Corp. announced an agreement to sell its interests in the Front Range Power Plant near Fountain and 24 other U.S. plants for $ 920 million to units of AIG. Front Range is the second-largest plant in the deal after a plant in Florida. Most of the other 23 plants are located in California, Florida and Pennsylvania. Most of the plants, including Front Range, burn natural gas to generate electricity.... AIG Global's Northern Star Generation LLC will acquire the power plants for its private equity funds, affiliated companies and third-party clients. AIG Financial Products Corp. will fund the acquisition.

Update of January 12, 2004: AIG the predator on the move: now it plans to launch a credit card in China. The Financial Times (Jan. 8) says this "highlights AIG's desire to diversify away from its core insurance operations into higher-margin personal finance businesses." Yep -- predatory lending in the U.S. and abroad...

Update of January 5, 2004: according to Best, ten different units of AIG, the world's largest insurer, held Parmalat notes with a total book value of $122.1 million, prior to the company receiving bankruptcy protection from the Italian government Dec. 28. Great due diligence...

Update of December 29, 2003: the AIG African Infrastructure Fund just acquired a 36.4% stake in Moroccan fertilizer importer Gharaf Corporation. From Moroccan fertilizer to predatory lending (though American General), AIG does it all...

Update of December 22, 2003: Last week AIG put out a press release about appointing a manager for its relationship with PICC Property and Casualty Co Ltd. Hammered Hank is quoted that he "is well suited to help consumers throughout China benefit from AIG's vast experience and skill as the world leader in A&H and related products. These products will be marketed through PICC's unrivaled distribution network, which serves approximately 70 pct of the country's general insurance market with over 128,000 agents and sales representatives throughout China." AIG - and its predatory lender American General -- running wild throughout China: now there's a thought...

Update of December 15, 2003: AIG's chairman, we'll call him Hammered Hank Greenberg, was in the U.K. last week, holding forth. He denounced asbestos claimants, and said that the insurance industry "is viewed like the man in the circus who has a pail and shovel behind the elephant, trying to clean up the mess... That's what we're expected to do many times, whether we should be responsible or not." Well. If Hammered Hank is holding the shovel and bucket, where have all his lobbyists gotten to?

Update of December 8, 2003: news last week that Don Kanak's been named co-chief operating officer and vice chairman of AIG clouds again the succession picture - just what Hank Greenberg, the eternal one, wants. Many presumed that Kanak's fellow co-COO Martin Sullivan, was standing first in line. "That remains our belief, though this latest move does add more uncertainty to that potential outcome," equity analysts with Morgan Stanley opined last week...

Update of December 1, 2003: from the federal district count in Philadelphia comes the decision In re Mintze, reciting that Ethel M. Mintze, 58, a North Philadelphia homemaker, challenged a $44,700 mortgage issue by American General Consumer Discount Co. in her bankruptcy petition. When Mintze was looking to finance a $3,800 heater installation in 2000, she was referred to American General, according to the opinion. Mintze alleged that the financing company required she borrow $44,700 as a condition of financing the heating project - a loan that would refinance her current mortgage and consolidate her credit card debt at a 13.44 percent annual percentage rate, the opinion said. But there was an arbitration provision of the contract, and when Mintze filed to undo the loan under the federal Truth In Lending Act, alleging predatory lending, American General asked to remove the case from bankruptcy court and moved to compel arbitration, U.S. District Judge Mary A. McLaughlin wrote. The bankruptcy court refused to dismiss the case and did not enforce the arbitration provision... More on this soon. For now out point is: AIG's American General remains a predatory lender...

Update of November 24, 2003: The American Banker of Nov. 18 recited that Hank Greenberg "in recent years... , has said it had no desire to buy a bank. 'We market through banks all the time without buying a bank,' he said last year at a Banc of America Securities conference." Nope -- they didn't need a bank (they own a savings bank) -- only a predatory lending finance company...

Update of November 17, 2003: AIG continues putting moves on China. On Nov. 14, SinoCast reported that Tang Yunxiang, president of PICC Property and Casualty Company Limited, said that the company signed the strategic investment agreement with AIG to strengthen the cooperation and develop the insurance products. Tang said that the company aimed to establish an international insurance company in 10-15 years... Greenberg, chairman and CEO of AIG, said that China's insurance market was of great potential. The two companies will develop jointly the products of the accident insurance and the short-term health insurance." Why not AIG's other specialty -- predatory lending? On that, state-by-state action is addressed in this new ICP map -- click here to view and use.

Update of November 10, 2003: AIG, one of the ultimately opaque, power mad and secretive companies, paradoxically runs television ads, at least in the United States, make it seem like a house of mirth. "AIG -- we know money," a woman's voice says. There's one mirroring a football game, "Go AIG!" The image from the ad has nothing to do with the company's culture, or M.O....

Update of November 3, 2003: Hank Greenberg's strong-arming of Dick Grasso is still reverberating, with the SEC now digging into the issue. Hank in his arrogance is proud -- "anything for the share price," is what he says -- and he means anything...

Update of October 27, 2003: AIG's earnings announcement on Oct. 23 stated, in an endless quote from Hank Greenberg, that "[b]Both U.S. and foreign consumer finance business had a very good quarter. Operating income is up 20.5 percent to $173.6 million. American General Finance, Inc. (AGF) had an outstanding quarter. The quality of the loan portfolio is good and demand is strong. AGF is opening new branches. This business is achieving an excellent return on equity. Our international consumer finance business also is achieving good results. Performance was substantially better in Hong Kong, in line with the up-tick in Hong Kong's economy... AIG has a large number of promising growth initiatives underway around the world. In addition to the purchase of GE's Japan life and U.S. personal a