The Obama Administration announced a $335 million settlement deal with Bank of America to settle charges of discriminatory lending practices. Here is, in ascending order of importance, the good, the bad, and the ugly.
The Justice Department deserves praise for responding to illegal bank behavior more aggressively than it's done in the past. So does the Occupy movement, and so do the many Americans who have expressed their outrage over the lack of prosecutions and sweetheart bank deals. Without them it's unlikely we'd be seeing a deal like this at all.
But while the Justice Department has taken a first step, the proposed agreement seems designed to do only the bare minimum its framers hoped would be needed to quell public outrage. While it will be sold as bold and decisive, it's not. In fact, this deal perpetuates some of the worst failings of past settlements the government's made with big banks.
As we said, it has good features. But where it's ugly, it's very ugly indeed. Hopefully the judge who reviews it will bear that in mind.
Ah, the banksters just never quit giving us fuel for our fires, do they? In today's news, we have this gem, courtesy of the Huffington Post:
The bank withheld key documents and data, prevented investigators from interviewing bank employees or asking certain questions, and was slow to provide information, according to a June 1 declaration by William W. Nixon, a fraud examiner and assistant regional inspector general for audit for the U.S. Department of Housing and Urban Development inspector general's office.
Due to Bank of America's "reluctance," Nixon resorted to asking the Justice Department to issue so-called civil investigative demands last December to compel testimony, a "less effective" means of carrying out its investigation, Nixon said. His office can't compel testimony on its own.
Bank of America, the largest handler of home loans in the U.S., threw up roadblocks to the investigation, Nixon said, like preventing his team from performing a "walkthrough" of the bank's documents unit.
The bank also failed to fully comply with subpoenas issued by Nixon's team. HUD's internal watchdog issued two subpoenas requesting documents and information, and what was returned was incomplete, had conflicting information, and in some cases, the bank provided excerpts of documents rather than the complete record.
Here's an example of what they were looking for:
Federal investigators found one bank employee who signed more than 75,000 foreclosure documents over the two-year period. If the employee worked every day during those two years, that amounts to about 103 documents signed per day, or one every five minutes.
The next time you hear someone blaming Fannie and Freddie for the mortgage meltdown, please supply this article to them and ask them what part they think Bank of America and its acquired puppet Countrywide played in the whole stinking mess.
This is not the definition of the word "is." The man got a mortgage. He was told that he would get enhanced customer service, and assumed it was because of his good credit score. He got the exact same mortgage rate that anyone else buying a mortgage at the time would have gotten. He didn't know the CEO of Countrywide, nor anything about a Friends of the CEO program [...]
Why does this feel like, in the interest of being able to sit on Leno and say, "I went after Democrats too!," Moore passed up the real story here? It would have been really powerful if he made the connection between the bullshit allegations about Dodd and the banking industry desperately wanting to put the breaks on important housing and foreclosure legislation that Dodd was championing in the Senate at that very moment. Well, mission accomplished assholes, excuse me, the Sheriff is here to foreclose on my house (is it possible its the same one from Roger and Me? Oh, the irony) [...]
All in all, still love Moore, still want everyone to see the movie, but kind of wish he hadn't decided to jump ugly with one of the most progressive Senators in the Senate -- the guy responsible for the Family and Medical Leave Act, the Credit CARD Act, who voted for cramdown, worked to make that disaster of a bankruptcy bill better, then voted against it twice, voted for a 15% cap on interest rates, and is co-sponsoring another cap that is likely to come up again, is a leader on direct-student-loan reform, is in favor of a consumer financial protection agency and stripping the fed of some of its regulatory authority, and just last week introduced legislation to reign in the diabolical overdraft fee practice-- all stuff, if you are keeping score, which Moore clearly wasn't, that banks would rather paint a hammer and sickle on their walls than accept! I wish Moore hadn't got played like a three dollar harmonica. He should donate the 10 grand to Dodd's campaign.
It appears that the premise of Moore's film is that banking interests have taken over the government and prevented any meaningful regulation on the industry. Dodd's case can be an example of that, but not in the way Moore thinks. The banking lobby has consistently kneecapped him, with old charges that have a Whitewater quality to them, with all the same innuendo and the same lack of factual detail, right at the moments when Dodd was trying to get things passed to crack down on them. Dodd could have given away the Banking Committee Chair to completely-in-the-pocket Tim Johnson, but he didn't. And in the last few days, Dodd has introduced the aforementioned legislation to end the practice of banks charging overdraft fees on debit cards automatically, with 1000% interest, instead of giving customers the opportunity to have a transaction denied; introduced a plan for a single bank regulator that is at odds with the Obama Adminstration and his House counterpart Barney Frank, as well as being hated by the banking industry; and has taken the lead on weakening the power of the Fed, which is deeply desirable. In other words, despite the many slings and arrows, Dodd is basically doing the job Michael Moore would expect someone in his position to do, and doing it with gusto. He should be commended and not smeared.