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tv   Tech Check  CNBC  September 21, 2022 11:00am-12:00pm EDT

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institutions like yours. so ms. rogers, what effect would that new layer of capital requirement have on an institution like yours and your customers? >> ranking member thank you for that question. and first and foremost, we think that regulation ought to be tailored and followed the risk of individual institutions and i think that's consistent with a philosophy that we all support. additional capital at higher cost causes us to actually potentially impair lending or slow down lending. it may cause us to do other things from a competitive standpoint to cover the cost of additional capital. >> is that what u.s. bank thinks >> thank you we continue to have a very simple business model and although we are larger than we were a few years ago, the businesses we're in are substantially the same our capital levels since 2007
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are actually 3x what they were at that time so we believe we have a strong capital rating which is reflected in our high debt rating. additional capital will increase the cost of debt. >> mr. dimon, you spoke yesterday about additional requirements for regulatory capital and liquidity standards and the impact it would have in the marketplace, will you speak to that? >> yes, sir. i give credit where credit is due. dodd frank accomplished a lot. i think the regulators should take a victory lap for that. having said that, things went too far. it's not just capital, liquidity requirements, do restrict lending, raise the cost of lending, damage markets a little bit, reduced mortgage lending at some of our banks. we want good regulations we need to spend more time recalibrating
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these regulations across the whole financial system. >> so there's a cost to this, and there's an economic cost and changes behavior of the institution, which means you don't lend as aggressively on the margins? >> unfortunately some of that is going to happen when things get worse. j.p. morgan will be sitting with a trillion dollars nable to deploy to help our clients at precisely the wrong time treasury markets and other markets get rattled in 2020, going back to 2019 and part of the reason was the inability of very well capitalized, liquid banks being able to do what they should do. >> which means you can't provide the liquidity in the end of quarter, end of year so we have choppy results as a result of regulations? is that how you see it with bank of america >> no question increasing capital for us to 1% makes us not be able to lend $160 billion of loans into the economy. it's that straightforward.
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>> so there's an economic cost to regulatory capital requirements that are beyond what is economic or historic needs for your institutions? thank you for your testimony >> thank you very much gentlewoman from new york mrs. maloney also chair of the house committee on oversight and reform is now recognized for five minutes >> thank you so much, chairman waters for calling this important meeting and all of our panelists. i thank you for all of your comments particularly those who talked about wanting to reduce overdraft fees that drain billions of dollars from america's poor and working class communities every year the consumer financial protection bureau has found that overdraft fees cost our consumers over $15 billion in 2019 alone and these fees
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disproportionately target and penalized low income consumers they found that almost 80% of overdraft and nonsufficient fund fees are born by only 9% of consumers and they're all financially vulnerable while i'm glad to see some banks have taken some initiative by eliminating or moving in that direction, it's concerning to me that it's taken this long and many banks still have yet to make any voluntary changes and with banks enacting different policies, consumers are left with little consistency, they're very confused by these different policies we must ensure that we have a comprehensive, permanent solution, and act to protect consumers that's why i have introduced the overdraft protection act, it bills on the credit card bill of rights which passed in 2009 and according to the cfpb has saved consumers over 16 billion a year by
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keeping fees in their pockets. i want to -- in the consumers' pockets. i want to ask bank of america and citi bank because in your testimony you talked about your actions to eliminate fees. can you elaborate what product offerings have you changed to reduce or eliminate the overdraft fees and can you speak to how your consumer banking division has remained profitable in light of all of these changes? first, mr. moynihan and then ms. fraser. >> i think you heard many of my colleagues talk about this, and this is a product in industry. the first is a no overdraft product. especially for students and younger people, we have 4 million of those, if you total it up across the board, that product allows people to have no overdraft capacity and then you have the ability for other products for people to opt in, and what we've done is reduced our overdraft fee from 35 to
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$10. we've reduced the ability to have the nsf type fees, number of occurrences all of that totalled up, we're down 60% this year and that will fall further but we're able to do that because of the scale and cape b abilities of our team in consumer banking the variety of banks in our system there's a variety of business models but one thing consistent the scale we've been able to achieve is allowing us to pass through to the consumer and remaining profitable. >> thank you ms. fraser. >> thank you, representative we are proud at citi to have eliminated overdraft fees and nsfs this was the right decision for our bank and is reflective of a multi-year commitment to having
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a customer friendly approach to fees similar to my colleague, mr. moynihan, we also have a product called the access product. it accounts for almost 20% of all of our accounts in addition to the no overdraft, also a very low cost customer friendly account growing substantially over the last few years and played a very important role during the pandemic for those most effected. it's something we're committed to continuing to grow. thank you. >> is there any other banks that can commit to overdraft -- to eliminating overdraft fees altogether by 2025 anyone else on the panel that can follow the leadership of these two banks? then i'd like to move to the interest rates that are rising and causing problems or challenges with the housing market and making it harder for
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first-time home buyers to be able to take out mortgages again, i'd like to ask both bank of america and citi bank what you have done, do you have any programs or ideas of how we can help facilitate home ownership, even with the challenges of increased interest rates would be moving the 30 year mortgage to sort of a 50 year mortgage to lower the interest rate payments per month? would that help? any ideas you may have and after that anyone else's ideas, first mr. moynihan and then ms. fraser >> we have programs that provide down payment assistance and grants for that if you get hud counseling we have programs developing 6 billion a year we do low income housing development and so it's a multifacet thing
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but i think at the end of the day, the amount of adjustment that will go on as rates adjust is intended to attack the inflation and it'll take a period of time to sort through. >> thank you, the gentlewoman's time has expired. >> i yield back. >> is now recognized for five minutes. >> that's chair waters at the house financial services committee. you're watching the big bank ceos testify in washington d.c welcome to "techcheck" i'm carl quintanilla with jon fortt you've been watching the bank ceo's testify we'll monitor to that and get back. in the meantime the president is addressing the u.n. general assembly let's listen in. >> war chosen by one man to be very blunt let us speak plainly a permanent member of the national security council invaded its neighbor attempted to erase a sovereign
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state from the map russia has shamelessly violated the core tenants of the united nation's charter no more important than the clear prohibition against countries taking the territory of their neighbor by force. again, just today president putin has made overt nuclear threats against europe and a reckless disregard for the responsibilities of a nonplif ration regime. now russia is calling up more soldiers to join the fight and the kremlin is organizing a sham referendum to try to annex parts of ukraine an extreme violation of the u.n. charter. this world should see these outrageous acts for what they are. putin claims he had to act
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because russia was threatened. but no one threatened russia and no one, other than russia, sought conflict. in fact, we warned it was coming and with many of you we worked to try to avert it putin's own words make his true purpose unmistakable just before he invaded, putin asserted, and i quote, ukraine was created by russia and never had, quote, real statehood and now we see attacks on schools, railway stations, hosp hospitals, on centers of ukrainian history and culture. in the past, even more horrifying evidence of russia's atrocities and war crimes. mass graves uncovered in izium,
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bodies according to those who excavated those bodies, showing signs of torture this war is about extinguishing ukraine's right to exist as a state. plain and simple and ukraine's right to exist as a people whoever you are, wherever you live, whatever you believe, that should not -- that should make your blood run cold. that's why 141 nations in the general assembly came together to condemn russia's war against ukraine. the united states has marshalled massive levels of security assistance and hue manitarian ad for ukraine. more than $25 billion to date. our allies and partners around the world have stepped up as well and today, more than 40
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countries represented here have contributed billions of their own money and equipment to help ukraine defend itself. the united states is also working closely with our allies and partners to impose costs on russia to deter attacks against nato territory to hold russia accountable for the atrocities and war crimes. because if nations can pursue their ambitions without consequences, then we put at risk everything this very institution stands for everything every victory won on the battlefield belongs to the courageous ukrainian soldiers but this past year the world was tested as well and we did not hesitate. we chose liberty, we chose sovereignty. we chose principles to which every party to the united nations charter is beholding we stood with ukraine.
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like you, the united states wants this war to end on just terms. on terms we all signed up for that you cannot seize a nation's territory by force the only country standing in the way of that is russia. so we, each of us in this body, who determined to uphold the principles and beliefs, we pledge to defend as members of the united nations, must be clear, firm, and unwavering in our resolve. ukraine has the same rights that belong to every sovereign nation we will stand in solidarity with ukraine. we will stand in solidarity against russia's aggression, period now, it's no secret that in the contest between democracy and autocracy, the united states, and i as president, champion a
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vision for our world that's grounded in the valleys of democracy. the united states is determined to defend democracy at home and around the world because i believe democracy remains humanity's greatest instrument for the challenges of our time we're working with the g 7 to prove democracies can deliver for the citizens and also deliver for the rest of the world as well. but as we meet today, the u.n. charter's very basis of a stable and just rule based order is under attack by those who wish to tear it down or distort it for their own political advantage. and the united nation's charter was not only signed by democracies of the world it was negotiated among citizens, dozens of nations with vastly different histories and ideologies united in their commitment to
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work for peace as president truman said in 1945, the u.n. charter, and i quote, is proof that nations, like man, can state their differences, can face them, and then can find common ground on which to stand, end of quote that common ground was so straightforward, so basic, that today, 193 of you, 193 member states, have willingly embraced these principles and standing up for those principles for the u.n. charter is the job of every responsible member state i reject the use of violence and war to concur nations or expand borders through bloodshed. to stand against global politics of fear and coercion to defend the sovereign rights of smaller nations, to embrace
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basic principles like freedom of navigation, respect for international law, and arms control. no matter what else we may disagree on, that is the common ground upon which we must stand. if you're still committed to a strong foundation for the good of every nation around the world, then the united states wants to work with you i also believe the time has come for this institution to become more inclusive so it can better respond to the needs of today's world. members of the u.n. security council, including the united states, should consistently uphold and defend the u.n. charter and refrain from the use of the veto, except in rare, extraordinary situations, to ensure the council remains credible and effective that is also why the united states supports increasing the number of permanent and
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nonpermanent representatives of the council. this includes permanent seats for those nations we've long supported and permanent seats for countries in africa, latin america, and the caribbean the united states is committed to this vital work, in every region we pursued new constructive ways to work with partners to advance shared interest from the indo-pacific to signing the declaration of migration and protection at the summit of americas to joining historic meeting of nine arab leaders to work toward a more peaceful, integrated middle east. to hosting the u.s. africa leader's summit this december. as i said last year, the united states is opening an era of relentless diplomacy, to address the challenges that matter most to people's lives. all people's lives tackling climate crisis as the previous speaker spoke to.
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strengthening global health security feeding the world. feeding the world. we made that priority and one year later we're keeping that promise. from the day i came to office we led with bold climate agenda, rejoined the paris agreement convened the major climate summits helped deliver critical agreements in the cop26. we helped get two-thirds of the world gdp on track to limit warming to 1.5 degrees celsius and now i have signed a historic piece of legislation here in the united states that includes the biggest, most important climate commitment we have ever made in the history of our country $369 billion toward climate change that includes tens of billions in new investments in offshore wind and solar doubling down on zero emission vehicles increasing energy efficiency supporting clean manufacturing
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our department of energy estimates this new law will reduce by 1 gig ton a year by 2030 while unleashing energy powered economic growth. and we will help in developing clean energy technologies worldwide not just the united states this is a global game changer and none too soon. we don't have much time. we all know we're already living in a climate crisis. no one seems to doubt it after this past year we meet, much of pakistan is still under water, needs help. meanwhile, the horn of africa faces unprecedented drought. families are facing impossible choices, choosing which child to feed and wondering whether they'll survive. this is the human cost of climate change and it's growing, not lessening.
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so as i announced last year, to meet our global responsibility, my administration is working with our congress to deliver more than $11 billion a year to international climate finance. to help lower income countries implement their climate goals. and ensure a just energy transition the key, part of that will be our plan which will help half a billion people, especially vulnerable countries, adapt to the impacts of climate change and build resilience this need is enormous. so let this be the moment we find within ourselves the will to turn back the tide of climate devastation and unlock a resilient, sustainable clean energy economy to preserve our
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planet on global health we've delivered more than 620 million doses of covid-19 vaccine to 116 countries around the world, with more available to help meet the countris' needs. all free of charge, no strings attached and working closely with the g20 and other countries in the united states to help lead the change to establish a ground breaking new fund for pandemic prevention preparedness and response at the world bank at the same time, we've continued to advance the ball on enduring global health challenges later today i'll host the seventh replenishment conference for the global fund to fight aids, tuberculosis and malaria i have pledged to contribute up to $6 billion to that effort so i look forward to welcoming
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historic grounds of pledges at the conference regarding one of the largest global fund-raisers ever held in history we're also taking on the food crisis head on with as many as 193 million people around the world experiencing acute, acute food insecurity. a jump of 40 million in a year today i'm announcing another $2.9 billion in u.s. support for life-saving humanitarian and food security assistance for this year alone. russia, in the meantime, is pumping out lies, trying to pin the blame for the crisis -- the food crisis on the sanctions imposed by many in the world for the aggression against ukraine so let me be perfectly clear about something. our sanctions explicitly allow, explicitly allow russia the
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ability to export food and fertilizer no limitation. it's russia's war that is worsening the food insecurity. and only russia can end it i'm grateful for the work here at the u.n., including your leadership mr. secretary general, establishing a mechanism to export grain from black sea ports in ukraine that russia had blocked for months. and we need to make sure it's extended we believe strongly in the need to feed the world. that's why the united states is the world's largest supporter of the world food program more than 40% of its budget. we're leading support, leading support of the unicef efforts to feed children around the world and to take on the larger challenge of food insecurity in the united states, introduced a call to action, a road map eliminating global food -- to
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eliminating global food insecurity that more than 100 nation member states have already supported. in june, the g 7 announced more than $4.5 billion to strengthen food security around the world through usaid's feed the future initiative the united states is scaling up innovative ways to get drought and heat resistance seeds into the hands of farmers who need them while distributing fertilizer and improving efficiency so farmers can grow more while using less and we're calling on all countries to refrain from banning food exports or hording grain while so many people are suffering. because in every country of the world, no matter what else divides us, if parents cannot feed their children, nothing, nothing else matters if parents cannot feed their children as we look to the future, we're
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working with our partners to update and create rules of the road for new challenges we face in the 21st century. we launched the trade technology council with the european union to ensure that key technologies, key technologies are developed and governed in the way that benefits everyone. with our partner countries and through the u.n., we're supporting and strengthening the norms of responsibility, responsible state behavior in cyber space and working to hold accountable those who use cyber attacks to threaten international peace and security with partners in the americas, africa, europe and the middle east, and indo-pacific we're working to build a new economic ecosystem where every nation gets a fair shot and economic growth is resilient, sustainable and shared
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that's why the united states has championed a global minimum tax and we will work to see it implemented so major corporations pay their fair share everywhere it's also been the idea behind the indo-pacific economic framework which the united states launched this year with 13 other indo-pacific economies. we're working with our partners in the pacific islands to support a vision for a critical indo-pacific region that's free and open, connected and prosperous, secure and resilient, together with partners around the world we're working to secure resilient supply chains that protect everyone from coercion or domination and i'm sure that no country with use energy has a weapon and as russia's roll riles the global economy, we're also calling on major global creditors including the nonparis club countries to
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transparentally negotiate debt forgiveness for low income countries to fore stall broader economic political crisis around the world. instead of infrastructure product that generated huge and large debt without delivering on the promises, let's meet the enormous infrastructure needs around the world with transparent investments, high standard projects that protect the rights of workers and the environment. key to the needs of the communities they serve, not to the contributor. that's why the united states, together with fellow g7 partners launched a partnership, we intend to collectively mobilize, $600 billion in investment through this partnership by 2027 dozens of projects are already under way. industrial scale vaccine manufacturing in senegal transformative solar projects in
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angola first of its kind small nuclear power plant in romania these are going to deliver returns not just for the countries but everyone the united states will work with every nation including our competitors to solve global problems like climate change climate diplomacy is not a favor to the united states or any other nation and walking away hurts the entire world let me be direct about the competition between the united states and china as we manage shifting geopolitical trends, the united states will conduct itself as a reasonable leader. we do not seek conflict. we do not seek a cold war. we do not ask any nation to choose between the united states or any other partner but the united states will be unabashed in promoting our vision of a free, open, secure and prosperous world and what we have to offer communities of nations
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investments that are designed not to foster dependency but to alleviate burdens and help nations become self-sufficient partnerships not to create political obligation but because we know our own success, each of our successes increased when other nations succeed as well. when individuals have the chance to live in dignity and develop their talents, everyone benefits critical of that is living up to the highest goals of this institution. increasing peace and security for everyone, everywhere the united states will not waiver in our unrelenting determination to counter and thwart continuing theorist threats to our world and we will lead with our diplomacy to strive for peaceful resolution of conflict we seek to hold peace and stability in the taiwan straits, remain committed to our one china policy, and we continue to
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pose unilateral changes in the status quo by either side. we support an african union led peace process to end the fighting in ethiopia, restore security for all its people. in venezuela where years have driven people from that country, we urge them to return to free and fair elections we stand with our neighbor in haiti as it faces political fuelled gang violence, an enormous human crisis and we call on the world to do the same we have more to do we continue to back the u.n. mediated truce in yemen which delivered precious months of peace to people who have suffered years of war. and we will continue to advocate for lasting negotiating peace between the jewish and democratic state of israel and the palestinian people
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the united states is committed to israel's security full stop and a negotiated two state solution remains, in our view, the best way to ensure israel's security and prosperity for the future and give the palestinians the state to which they are entitled both sides to fully respect the equal rights of their citizens both people enjoying equal measure of freedom and dignity let me also urge every nation to recommit to strengthening the nuclear nonproliferation regime through diplomacy. no matter what else is happening in the world, the united states is ready to pursue critical arms control measures a nuclear war cannot be won. and must never be fought the five permanent members of the security council just reaffirmed that commitment in
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january. but today, we're seeing disturbing trends. russia shunned the nonproliferation ideals embraced by every other nation embraced at the 10th review conference. and today they're making irresponsible nuclear threats to use nuclear weapons. china is conducting an unprecedented concerning nuclear buildup without any transparency despite our efforts to begin serious and sustained diplomacy, the democratic people's republic of korea continues to violate u.n. sanctions while the united states is prepared for a mutual return to the joint comprehensive plan of action if iran steps up to its obligations, the united states is clear we will not allow iran to acquire a nuclear weapon. i continue to believe that diplomacy is the best way to
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achieve this outcome the nonproliferation regime is one of the greatest successes of this institution we cannot let the world now slide backwards. nor can we turn a blind eye to the erosion of human rights. perhaps singular among this body's achievements stands the universal deck are lags of human rights which is a standard by which our fore bearers challenged us to measure ourselves. they made clear in 1948 human rights are the basis for all that we seek to achieve. and yet today, in 2022, fundamental freedoms are at risk in every part of our world from the violations of -- detail recent reports by the office of u.n. reports detailing by the u.s. high commissioner to the horrible abuses against
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pro-democracy activists and ethnic my norties by the military regime in ber ma. to the repression of women and girls by the taliban in afghan and today we stand with the brave citizens and the brave citizens of iran who right now are demonstrating to secure their basic rights but here's what i know the future will be won by those countries that unleash the full potential of their populations where women and girls can exercise equal rights, including basic reproductive rights, and contribute fully to building stronger economies and more resilient societies. religious and ethnic minorities can live their lives without harassment and contribute to the fabric of their communities where the lgbtq plus individuals live and love freely without being targeted by violence
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where citizens can question and criticize their leaders without fear of reprisal the united states will always promote human rights and the values enshrined in the u.n. charter in our own country and around the world let me end with this this institution, guided by the u.n. charter and the universal declaration of human rights is, at its core, an act of dauntless hope let me say that again. it's an act of dauntless hope. think about the vision of those first delegates, who under took a seemingly impossible task while the world was still smoldering think about how divided the people of the world must have felt with the fresh grief of millions dead. the genocide horrors of the
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holocaust exposed. instead they reached into the best of all of us and strove to build something better peace among nations, equal members for every member of the family adva advancement for all human kinds. my fellow leaders the challenges we face today are great indeed but our capacity is greater. our commitment must be greater still. so let's stand together to again declare the unmistakable resolve that nations of the world are united still that we stand for the values of the u.n. charter, that we still believe by working together we can bend the arc of history for a freer and more just world for our children, although none of us have achieved it. we're not passive witnesses to
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history. we are the authors of history. we can do this we have to do it for ourselves and for our future for human kind thank you for listening to me. i appreciate it very much. god bless you all. >> that is the president addressing the u.n. general assembly saying that russia's war in ukraine, in his words, has shamelessly violated ukraine's right to exist as a state and violated core tenants of the u.n. charter, none more so than the clear prohibition of countries taking their neighbors by force let's bring in eamon javers, and the new york attorney general has filed a civil lawsuit against former president trump, his family and the trump organization we have a copy of that suit now. hi
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hi, eamon. >> that's right. a lot of news breaking here in new york city. the president of the united states, you could see the strategy of the speech unfolding as he delivered it, first the president sought to isolate vladimir putin saying that putin made the decision to go into ukraine unilyuan unilaterally,e based it on a lie, there was no threat, there was no impending violence headed towards the russian people as a result of ukraine existing and then you can see president biden seeking to lay out -- >> before we get too far ahead let's get to the new york attorney general. >> i'm announcing that today we are filing a lawsuit against donald trump for violating the law as part of his efforts to generate profits for himself, his family, and his company. the complaint demonstrates that donald trump falsely inflated his net worth by billions of
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dollars to unjustly enrich himself and to cheat this system thereby cheating all of us he did this with the help of his other defendants, his children donald trump jr., ivanka trump, and eric trump and former trump organization cfo allen weissleberg and yesry mcconny. mr. trump and the trump organization repeatedly and persistently manipulated the value of assets to induce banks to lend money to the trump organization on more favorable terms than would otherwise have been available to the company. to pay lower taxes to satisfy continuing loan agreements and to induce insurance companies to provide insurance coverage for higher
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limits and at lower premiums his conduct was all in violation of executive law section 6312. which gives the attorney general broad and special powers to go after persistent and repeated fraud and illegality as part of demonstrating illegality under that section of law 6321 we show they violated several state criminal laws. including falsifying business records. issuing false financial statements insurance fraud. and engaging in a conspiracy to commit each of these state law violations we believe the conduct alleged in this action also violates federal criminal law, including issuing false statements to financial institutions and bank fraud.
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and we are referring those criminal violations that we've uncovered to the united states attorney for the southern district of new york and the internal revenue service as a result of these violations we are asking the court to, among other things, permanently bar mr. trump, donald trump jr., ivanka trump, eric trump from serving as an officer or director in any corporation or entity registered or licensed in new york to bar mr. trump, and the trump organization from entering into any new york state commercial real estate acquisition or from applying for loans from any financial institution in new york for five years. to pay for the financial benefits obtained as a result of the persistent fraudulent
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practices at an estimated $260 million and towards the end of my remarks i'll go into the other relief we are seeking. at the center of this -- of the year-long financial scheme were the statement of financial condition that were prepared annually by and for mr. trump. specifically from 2011 to 2021 these statements were compiled by the trump organization executives and were issued as a compilation report by mr. trump's accounting firm. the statements are explicit that the preparation was the responsibility of mr. trump. we're starting in 2016, the trustees of his trust, donald trump jr. and allen weissleburg for the sole benefit of
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mr. donald trump each statement was personally certified as accurate by mr. trump or by one of his trustees as part of the loan process. in the statement, weisselberg would meet to approve the final statement every year mr. trump made known, through allen weisselberg that he wanted his net worth reflected on the statements to increase a desire mr. weisselberg and others carried out year after year in their fraudulent preparation of the statements. and when asked about these meetings under oath as part of our deposition, both men, mr. trump and mr. weisselberg, invoked their fifth amendment privilege against self-incrimination and they refused to answer. when asked under oath if he, mr.
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trump, continued to review and approve the statements after becoming president of the united states in 2017, mr. trump again invoked his fifth amendment privilege and refused to answer. over the course of our investigation we found that mr. trump, his children, the trump organization used over 200 false allegations over that ten year period the issued statements that were in clear violation of general accepted principles -- general accounting principles in the united states despite representing these statements were prepared in accordance with these principles some of the common tactics they used include representing that mr. trump had cash on hand that he did not have.
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ignoring critical restrictions that would significantly impact property values when setting valuations changing the methodology used to value properties from year to year without reason or notice and using vastly different methods to value different properties, even in the same year and including tangible items such as brand premiums, the trump premium, and calculating an assets value. despite the fact they ignored the advice of outside professionals. they also ignored the advice and appraisals of outside professionals despite claiming those individuals provided certain figures. for example, they received a series of bank ordered appraisals for the commercial property at 40 wall street in new york city that calculated the value of the property at
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$200 million as of august 2010 and $2220 million as of november 2012 yet, in his 2011 statement, mr. trump listed 40 wall street with a value of $524 million, which increased to $530 million over the next few years more than twice the value calculated by the professionals. even more egregious, the $500 million plus valuation was attributed to information from the appraiser who valued the building at just over $200 million another deceptive strategy they employed was to use objectively false numbers to calculate property values. take mr. trump's triplex
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apartment in trump tower on fifth avenue he represented his apartment spanned more than 30,000 square feet, which was the basis for valuing the apartment. in reality, the apartment had an area of less than 11,000 square feet something that mr. trump was well aware of. and based on that inflated square footage, the value of the apartment in 2015 and 2016 was $327 million to this date, no apartment in new york city has ever sold for close to that amount tripling the size of the apartment for purposes of the valuation was intentional and deliberate fraud not an honest mistake. mr. trump was intimately familiar with the layout of both the building and the apartment having personally overseen the
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construction of both despite his sworn testimony before invoking his fifth amendment privilege, mr. weisselberg conceded that using the false square footage improperly inflated the value of the apartment almost threefold mr. weisselberg admitted this amounted to an overstatement of give or take, $200 million misrepresenting the size of the apartment was only one of the many ways that mr. trump intentionally misvalued his asset for the purposes of increasing his net worth and inducing banks to offer more favorable terms. mr. trump also routinely ignored legal restrictions on development rights and marketability on properties that would significantly decrease property values for example, let's take trump
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park avenue in new york. this building contains both commercial and residential space. the unsold residential condo units owned by mr. trump and the trump organization represented the lion's share of the reported value for this property. this property mr. trump and his children intentionally ignored legal restrictions on some of the units that would have drastically changed the valuation, specifically the 12 -- 12 of those units were actually rent stabilized apartments a professional appraiser valued those 12 units at around $750,000 noting that the rent stabilized units cannot be marketed as individual units for sale because the current tenants cannot be forced to leave. despite this professional valuation and mr. trump knowing full well the legal restrictions
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the 12 rent stabilized units were valued, he valued them collectively on his statement at $49 million. that is about 65 times the appraised valuation. mr. trump also blatantly ignored legal restrictions at mar-a-lago mar-a-lago was valued on the false premise that it sat on unrestricted property and could develop for residential use. however, mr. trump knew that mar-a-lago was subject to a host of onerous restrictions and limitations. mr. trump himself signed deeds sharply restricting changes to the property and donating his residential development rights in an effort to get a tax deduction and later to lower his property taxes on the property the deeds also require mr. trump to donate over 23% of
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mar-a-lago's value to the historic trust for historic preservation if he ever sold it. despite these significant restrictions, mr. trump valued the property based on the false premise that it was an unrestricted residential 18-acre plot of land that could be sold and used as a private home in fact, the valuations represent that these restrictions even exist. the club generated annual revenues of less than $25 million and should have been valued at more than -- valued at about $75 million. however, mar-a-lago is valued as high as $739 million mr. trump used inappropriate schemes to inflate the value of his other golf clubs
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he valued the clubs based on their fixed assets, in other words the money spent to require and maintain them despite the valuation from professionals this practice was inappropriate for a club operating as an ongoing business he, again, added a brand premium when determining the value of the club >> that is new york attorney general letitia james laying out a civil lawsuit against former president trump, members of his family and his business seeking a $250 million judgment and making a criminal referral to the department of justice. let's bring back our eamon javers in new york calling this intentional and deliberate fraud and detailing the findings here. and this comes as the president is also facing, you know, legal jeopardy over retaining documents at mar-a-lago.
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how does this shape the political landscape and as we head into mid-terms and beyond >> john, first of all these are significant allegations against the president of the united states, the attorney general of new york here suggesting he inflated the value of all sorts of assets that he did this deliberately, knowingly and with the aid of his accountant and also his adult children. one of the interesting aspects of this we have now ivanka trump, donald trump jr. and now eric trump brought into this case as well they'll have their own legal strategies they'll have their own defense mechanisms and generationally a different time horizon for defending this sort of thing you could see penalties here against the former president of the united states including things like banning him from conducting business or taking out a loan in the state of new
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york a long process between now and then, of course, and the former president is likely to fight this in court. we do have a statement already now from the trump legal team. they're saying today's filing is neither focused on the facts nor the law. rather it's solely focused on advancing the attorney general's political agenda it's abundantly clear the attorney general's office has exceeded its statute of authority. so, john, this is a political figure who has escaped scrutiny on a number of occasions, the very highest level impeach in the united states senate, impeachment trials he's been able to prevail in all of those cases for the most part by relying on this formulation politically that he is the victim here and there's an unjust prosecution you can expect to see that strategy play out here and expect to see it warmly received by his political base particularly when you have a political figure like james who's a democrat in a blue state
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like new york as the sort of antagonist or foil here for him politically. i think you can expect to see trump once again pointing to himself as the victim of prosecutors gone wild here, john back over to you >> eamon, it's carl. i wonder if you can talk about the scope of the investigation and some of the allegations. she framed it as being staggering fraud, 200 false or misleading statements between the years of, say, 2011 and 2021 that she, i guess is rguing, h had personal oversight of. >> and she's saying here some of this is particularly blatant he more than tripled the size of his apartment falsely on paper from about 11,000 square feet to about 30,000 square feet in order to make it seem more valuable and therefore have a financial benefit to him she's also saying that his personal property in mar-a-lago
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was falsely described as unencumbered by various legal restrictions at a time when trump had signed documents which said in fact it was encumbered by various restrictions. so she's saying this was blatant and trump knew it and he did it anyway and she's trying to drive a very clear thru line here that donald trump did this, did it anyway because of the financial benefit because as heolo allegedly toldi accountant, and of course she's alleging here significant amounts of fraud you can imagine he'll respond to this pretty quickly and then we'll see what the legal process is from here but this opens up another legal front here from the president and he does not have the protections of the presidency any longer as he seeks to defend himself in all this. carl >> not at the moment, eamon.
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we'll see, though, what that portends for his political ambitions from here. we also want to bring in robert frank. a number of allegations here about how a very wealthy person is valuing property. how common is this sort of practice perhaps and how common is it for it to be prosecuted in this way? >> well, new york especially there's all kinds of games always being played both on the commercial and residential side to inflate values and sales and deflate those values for tax purposes what does it mean for the trump organization what does it mean for trump's financial empire and letitia james saying this is a death nel to the trump organization, but worst case he and his family are prevented from holding office in a new york based company and prevented from taking loans.
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even if that is the case, again a worst-case scenario, the trump organization does not depend on new york all that much compared to let's say florida, bedminster, and new jersey so even though the trump administration started and its origin is in new york, even if they get cut off from those assets there's the trump hotel in central park, three smaller golf courses and there's trump tower. the trump organization really earns its living from mar-a-lago, from bedminster, from dural, from these other courses and properties that are outside new york so a $250 million fine especially since they just sold the washington hotel for 375 is probably manageable for the trump organization after all is said and done. the bigger issue for the trump organization and trump is this criminal case that is now under way on the tax fraud side after the ceo, alan weisselberg pled
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guilty to tax fraud. that is a case that could have much deeper consequences for the future of the trump organization and their fortune than this civil case >> that's good perspective because it's hard to keep track. we're going to watch all of this as the market's been hanging in there. equities green two-year did get about 4 let's get to the judge in the half carl, thank you very much. welcome, everybody, to the half time report. we've got less than two hours now before that fed decision and the press conference with the chairman i have of course the investment committee with me today to debate what the market reaction is likely to be no matter what they say and do. let's check the markets right now give you an idea where we are. as i said a couple hours ahead of that decision


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