Total high-interest loans 2005-2007:
At least $65.2 billion
Federal bailout money received:
- Status: CLOSED. Long Beach was closed by Washington Mutual in 2007.
- History: Originally a California-based savings and loan, founded in 1979, Long Beach Bank became a federally chartered thrift institution in 1990. In October 1994, it became Long Beach Mortgage Co. Washington Mutual (which has, in some form, existed since 1889) purchased Long Beach Mortgage in October 1999 and used it as its subprime lender. Long Beach stopped making loans in the fourth quarter of 2007. In September 2008, after billions of dollars in losses, skittish depositors made a run on Washington Mutual (known widely as WaMu) and it was seized by the Office of Thrift Supervision. It was the largest bank failure in U.S. history. The Federal Deposit Insurance Corp. “facilitated” the bank’s sale to JPMorgan Chase & Co. which paid $1.9 billion.
- Parent/subsidiary companies: Long Beach Mortgage Co. became part of Washington Mutual in 1999.
- CEO: CEO (Washington Mutual): Kerry K. Killinger
- Most recent salary: 2007 — $1,000,000; $5,250,770 total compensation
- Location: Anaheim, California
- Year founded: 1979
- Backers: Long Beach issued its own securities underwritten by Washington Mutual in partnership with Wall Street banks like Lehman Brothers and Goldman Sachs. It also sold loans to firms like Goldman Sachs and Bear Stearns.
- Lobbying: 1999-2008: Washington Mutual reported $5,873,000 in lobbying expenditures. **
- Total Contributions: At least $3,678,928 *
- Top Recipients:
1. Democratic Congressional Campaign Committee $172,900
2. Democratic Governors Association $145,000
3. National Republican Senatorial Committee $105,000
4. Democratic Senatorial Campaign Committee $93,700
5. National Republican Congressional Committee $87,650
• In 2001, a Mississippi jury awarded $71 million in damages — later reduced to $54 million — when Washington Mutual Finance Group was found to have refinanced loans for customers repeatedly in order to collect excessive fees.
• In 2004, Long Beach settled with the California Department of Corporations over allegations that the company was charging interest on certain mortgages for an extra day before the loans closed; the firm agreed to pay $800,000.
** Lobbying totals calculated by the Center for Public Integrity using data from the Senate Office of Public Records.
* Contribution grand total includes employee and soft money contributions from the lender and its subsidiaries. Top recipient totals include employee and political action committee contributions. Data provided by CQ Money Line, analysis by the Center for Public Integrity.
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