Banks Spend Big Bucks on Brag Ads

Jan. 30, 2009 — -- Some of the country's biggest recipients of taxpayer bailout money are busy bragging about what a good job they are doing, with one even pointing out that it has established two regional centers to help struggling homeowners.

There's at least one hitch, however.

JPMorgan Chase, which announced the creation of the two regional centers, won't say where they are located. The banking giant won't even say which cities they are in.

American banks, awash in taxpayer bailout cash, have been trying to boost their tattered public images by taking out expensive full-page ads to tout the number of people they've helped by easing their mortgage rates.

The expensive public relations campaign is the latest questionable action by banks that are being propped up with public funds.

The PR drive came a day after President Obama railed against bank executives as "shameful" and "the height of irresponsibility" for giving themselves nearly $20 billion in bonuses, despite having managed their institutions and the nation's economy to the edge of disaster.

In recent days the White House also had to intervene to shame Citigroup into dropping plans for a new $50 million executive jet.

Former Merrill Lynch CEO John Thain agreed to personally repay $1 million he spent remodeling his office after a public outcry, and New York's attorney general has begun investigating why Thain gave out $4 billion in bonuses to the failing company's top officers while it was laying off thousands of employees.

And Congress has complained that most of the banks that have been given billions in federal dollars so they can resume lending are hoarding the cash or using it to buy other banks.

Faced with such a withering barrage of criticism, the big banks have tried to repair their images.

JPMorgan Chase, which was bolstered with $25 billion from the Troubled Assets Relief Program, claims in a full-page ad in The New York Times today -- which it calls the "seventh in a series" -- that it loaned more than $100 billion in the last quarter. Earlier it claimed to have modified mortgages for 330,000 customers over the past two years. A full-page ad in The New York Times costs $150,000.

JPMorgan Chase also used ads to announce the two regional centers to help borrowers.

Banks Brag About Helping Homeowners

Bank of America, buoyed by $45 billion in TARP funds, advertised that it had modified mortgages for 230,000 customers in 2008.

Citigroup CEO Vikram Pandit, whose bank also got $45 billion in TARP money, told a conference earlier this week, "I think we have done a pretty good job. Over the last year we have modified 370,000 mortgages."

The spending on public relations campaigns has prompted fresh criticism from watchdogs.

"I'm not sure banks should be wasting their money taking ads out in newspapers talking about the great job that they're doing, one because they're not doing a great job and two because they don't have the money," Ira Rheingold, executive director of the National Association of Consumer Advocates, told "Good Morning America" today.

Homeowner Gary Robinson told "GMA" that he's been trying to get his loan modified for nearly a year.

"It's frustrating when you hear a bank is telling people they are helping that all you have to do is call, because I have called and that is not true," said Robinson.

"GMA" tried to talk to some of the bank's customers whose mortgages had been altered, but none of the banks were willing to put ABC News in touch with a homeowner whose mortgage terms had been eased.

When JP Morgan was asked about the two regional centers it has opened to help hard-pressed mortgage holders, it refused to identify their locations beyond stating that they are in California and Florida.

JPMorgan spokesman Tom Kelley told "GMA" the bank's locations weren't public yet because "We want to make sure they've got the processes right."

He added that the the company wanted to make sure the bank representatives at the new center were prepared for an influx of new customers.

Asked if he would be willing to at least reveal the cities where the centers are located, Kelley said, "I'm still not comfortable. Until they get … because they are so new."

Kelley did not explain how troubled mortgage owners were supposed to approach the centers for help if they don't know where they were located.

New Bank Bailout Plan Due Next Week

The Obama administration is preparing to distribute another $350 billion in TARP funds and is hammering out new plans to bail out the banks.

"Not much can be done about the money that's already been paid out in bonuses. That's basically gone," said George Stephanopoulos, ABC News' chief Washington correspondent.

"Administration officials tell me when the administration comes forward next week with new plans to bail out the banks and shore up the banks, they're going to write into those contracts real restrictions on what the banks can do in terms of executive compensation and payout bonuses," Stephanopoulos said.

Senate Banking Committee Chairman Chris Dodd, D-Conn., has threatened to summon bank officials to testify before Congress and explain themselves.