The Tiny Chinatown Bank That Was Scapegoated After the Financial Crisis
Legendary 'Hoop Dreams' documentarian Steve James's newest film, 'Abacus: Small Enough to Jail,' tells the story of the only US bank prosecuted after the 2008 financial crisis.
Abacus Federal Savings Bank founder Thomas Sung. Photo courtesy of Kartemquin Films
The financial crisis of 2008 is a story of winners and losers: The rich got richer, while most everyone else ended up with less. Lehman Brothers excepted, the major "too big to fail" banks were propped up and allowed to continue to thrive and expand. Some fines were doled out, but only one Wall Street executive went to jail—even after the industry's nakedly fraudulent ways were exposed during congressional investigations and on the blog of investigative journalist Matt Taibbi. Abacus Federal Savings Bank of Chinatown, New York, a small, family-run bank, was not as lucky.
Making its US premiere recently at the 54th New York Film Festival, Abacus: Small Enough to Jail is the newest from legendary filmmaker Steve James. The 61-year-old documentarian, who helped repopularize the genre commercially with Hoop Dreams, has spent more than 25 years crafting moving meditations on gang violence in Chicago (The Interrupters), the life and times of famed critic Roger Ebert (Life Itself), and the CTE-related dangers football players face (Head Games). Abacus profiles the only US bank prosecuted for selling fraudulent mortgages in the wake of the 2008 crash.
"The way I heard about it was through [producer] Mark Mitten," James told me of the case, which didn't generate much mainstream-media attention outside of New York. "It's one of these really important stories that no one seems to know about. My joke was the tagline should be, 'The most amazing story you've never heard of!"
Founded in 1984 by Thomas Sung—a Shanghai-born lawyer who grew tired of the traditional banking system's reluctance to lend to Chinese Americans—Abacus is one of Chinatown's most significant financial institutions. Intercutting his interviews with scenes from Frank Capra's It's a Wonderful Life, James clearly tries to draw parallels between Sung and Jimmy Stewart's good natured, small-town banker in the classic film.
At the film's start, Sung is 80 years old and still running the bank when the trouble begins. When various managers at the bank realize an employee named Ken Yu has been taking bribes and falsely inflating customer income claims, the bank reports itself to the authorities. The New York district attorney's office—which had been unable (or unwilling) to bring any of the "too big to fail" banks to heel for their behavior—digs in on Abacus, indicting the bank and 19 of its staffers and humiliating many of them with a chain-gang parade that looks like it could have been from O, Brother, Where Art Thou?. The DA, Cyrus Vance Jr., brands the bank "a criminal conspiracy fueled by greed."
"The fact that he related it in his indictment to [the crisis of] 2008 and that there was a perp walk of these low-level, current, and ex-employees—all of those things I think are revealing of the motives here," said James.
The film portrays both sides of the argument surrounding Abacus's case, with James not just interviewing the Sung family and their employees, but Vance and Polly Greenberg, chief of the city's Economic Crimes Bureau—along with jurors who were skeptical of the Sungs' claims of innocence and found it odd that the bank would lend hundreds of thousands of dollars to people whose entire incomes resided in Chinatown's robust cash economy. "I think he legitimately thought that real fraud was going on and something needed to be done about it," James said in reference to the district attorney's motives for bringing the case.
Only 30 loans, all of which were performing well, were at the heart of the DA's case. Given how small a stake Abacus had in the actual drivers of the collapse—and the fact that, unlike most banks, they self-reported the malfeasance they were ultimately prosecuted for—the movie paints a portrait of scapegoating writ large. "Ken Yu was corrupt, but in his corruption, he's getting a few thousand dollars here and a few thousand dollars there," James explained. Compared to the crimes of the big banks, which Vance refers to as "less than ethical" and who, unlike Abacus, did not self-report, James said, "It's all incredibly chump change."
Although the grand, seemingly industry-wide scheme of subprime mortgage lending and collateralized debt obligation swaps was something Abacus wasn't involved in, the film shows how one untrustworthy employee and the unorthodox financing arrangements within New York's Chinese community led the New York district attorney's office to attempt to make a example out of Abacus. Abacus: Small Enough to Jail is a harrowing legal and political thriller, but also the portrait of a truly community-oriented financial organ becoming a pawn to New York power politics.
"Here's an institution that is the sort of mirror opposite of the big banks, in terms of assets or engaging in the types of practices that the big banks did, really taking advantage of people," James said, suggesting than no institution with more clout would have been treated this way. "The fact that this case could go on so long is really telling."
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Find screening info for Abacus: Small Enough to Jail on the film's website.