Archive for bank regulations

Shhh! FDIC made settlement deals with banks rather than sue-- and promised not to tell.

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banks too big to jailwhat's the big secret

Elizabeth Warren said, “When banks are too big to fail, too big to jail, too big for trial, too big to regulate, too big to shrink… they are just too big.”

Gee, ya think she's on to something? She also said:

This is wrong — just plain wrong. We are a country that believes in equal justice under the law — not special deals for the big guys. And that’s not all the special deals that the big banks get.

Which brings us to a rather lengthy L.A. Times above-the-fold front-pager that could have been subtitled:

shhh

[T]he government cut a deal with the bank's lawyers to keep it quiet: a "no press release" clause that required the FDIC never to mention the deal "except in response to a specific inquiry." [...]

Under the Freedom of Information Act, The Times obtained more than 1,600 pages of FDIC settlements, made from 2007 through this year with former bank insiders and others accused of wrongdoing. The agreements constitute a catalog of fraud and negligence: reckless loans to homeowners and builders; falsified documents; inflated appraisals; lender refusals to buy back bad loans.

Defendants benefit by settling because they can avoid admitting guilt and limit the damages they might face in court. The FDIC benefits by collecting money without the hassle and expense of litigation. The no-press-release arrangements help close those deals.

Here's what Quicken Loans spokeswoman Paula Silver had to say:

"Quicken Loans and the FDIC entered into a 'confidential' agreement nearly three and a half years ago which clearly states that no party admits liability nor wrongdoing."

Former bank examiner Richard Newsom, who specialized in insider-abuse cases for the FDIC in the aftermath of the S&L debacle, said he couldn't understand the shift, unless the agency doesn't "want people to know how little they are settling for."

And coincidentally, as I was writing this up, I spotted this tweet:

tweet fdic deals banks

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Elizabeth Warren: "When banks are too big to fail, too big to jail, too big for trial, too big to regulate, too big to shrink... they are just too big."

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elizabeth warren senate banking committee hearinggo get 'em

http://warren.senate.gov
Senator Elizabeth Warren's Q&A at the March 7, 2013 Banking Committee hearing entitled "Patterns of Abuse: Assessing Bank Secrecy Act Compliance and Enforcement." Witnesses were: David Cohen, Under Secretary for Terrorism and Financial Intelligence, United States Department of the Treasury; Thomas Curry, Comptroller, Office of the Comptroller of the Currency; and Jerome H. Powell, Governor, Board of Governors of the Federal Reserve System.

Too big to fail has morphed into too big to prosecute. Attorney General Holder:

"I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large."

Today, Senator Warren sent this email out:

Laffy--

Attorney General Eric Holder indicated in testimony before the U.S. Senate that some Wall Street banks have gotten so big that they are now above the law.

He actually said earlier this week:

I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.

This is wrong -- just plain wrong. We are a country that believes in equal justice under the law -- not special deals for the big guys. And that's not all the special deals that the big banks get.

According to recent calculations by Bloomberg, the top ten biggest banks receive an $83 billion subsidy every year in the form of lower borrowing costs -- something not available to your community bank or credit union. The markets think that, if things get tough, the government will be there to bail out the big banks again but not the little guys.

To put things in perspective -- that $83 billion subsidy is about the same amount of money being fought over in the sequestration.

So why are we still debating this issue at all? Isn't it obvious that the "too big to fail" problem still exists and is bad for small banks? Bad for taxpayers? Bad for our economy? Bad for justice?

Here's one theory that worries me: maybe people believe that the banks have in fact become too big to shrink. They have started to say that we can't cut these banks down to size.

I'm not one of them, and neither are colleagues of mine like Sen. Sherrod Brown who have been fighting hard on this issue. We know we can take on the big banks and their army of lobbyists and win because we've done it before.

When banks are too big to fail, too big to jail, too big for trial, too big to manage, too big to regulate, too big to shrink, and too big to reform... they are just too big.

We're just getting started here.

Thank you for being a part of this,

Elizabeth

Have I mentioned how utterly thrilled I am that she's a U.S. Senator? We need 99 more like her.

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Elizabeth Warren wins Senate Banking Committee seat!

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Wall Street, get your Pepto Bismol ready, here comes Senator Elizabeth Warren. The consummate consumer advocate who will be in a position to influence regulators and financial institutions will now be in a better position to drive the GOP crazy, too.

HuffPo:

... Elizabeth Warren ... will be tapped to serve on the Banking Committee, according to four sources familiar with the situation. It's a victory for progressives who battled to win her a seat on the panel that oversees the implementation of Dodd-Frank and other banking regulations.

 

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Banks flood Mitt Romney's campaign with donations, 3 times more than to Pres. Obama, most skewed to one party in decades

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Big Banks overwhelmingly support Willard Romney as the GOP presidential nominee, but that was to be expected. After all, the guy bathes in cash and eats hundred dollar bills for appetizers (and he doesn't care who he hurts making his zillions). What's even more disturbing are the numbers, not to mention who they favor.

Via The Miami Herald:

Employees at the five largest U.S. banks by assets, including Bank of America Corp. and Wells Fargo & Co., had given Romney about $600,000 through the first three quarters of 2011, according to the most recent filings available from the Federal Election Commission.

The second-largest recipient of bank employee contributions, President Barack Obama, had far less, about $200,000, the Observer analysis showed.

Financial institutions really, really, really do not want to be regulated, which, of course, is why they should be. Doing away with financial reform, specifically repealing Dodd-Frank, has been a GOP mantra this election season, as Big Banks are doing all they can with their enormous donations to influence who does what:

Donations from commercial bank employees and PACs to Republican candidates for president and Congress made up 68 percent of the total so far. Should that pattern continue, it would mark the most skewed to one party the spending has been in more than two decades. For all of the 2008 cycle, bankers gave 52 percent of their money to Republicans. [...]

In Congress, commercial bank employees and PACs have given $5.4 million to Republican candidates, while giving $2.4 million to Democrats, according to the latest data from the Center for Responsive Politics. That's a 69 percent edge to Republicans so far.

According to the Financial Crisis Inquiry Commission, between 1999 and 2008, the financial sector spent more than $1 billion on campaigns.

And now that the Supreme Court has gifted us with their lovely 2010 Citizens United decision, the Republican nominee's slogan should be, "You ain't seen nothin' yet!"

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Video- President Obama Comments on the Financial Reform Bill

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I have to commend FDL for being really on top of the videos lately. Huge thanks.

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