FDIC

The John Walsh-Liz Warren-Investors & Homeowners Cage Fight

I noted the other day that the Administration was floating a ridiculously small $20 billion Get out of Jail Free plan to excuse the banksters fort their foreclosure fraud. Apparently, the banksters think that $20 billion is just a “crazy figure” that will never be imposed. The actual homeowners affected by the banksters’ crime, however, believe it is “chump change.” From a press release from the CrimeShouldn’tPay effort:

“We need more than just another slap on the wrist.  Home prices have plummeted by $9 trillion over the last four years because of the massive fraud that the big banks perpetrated on the American people. $20 billion is chump change, especially when you divide that amongst the nation’s 14 largest banks,” says Gina Gates from San Jose, CA who lost her home fraudulently to JP Morgan Chase.  “This cannot be more ‘business as usual’ for the nation’s biggest banks – break the law, make hundreds of billions of dollars doing so, and then pay a small percentage of their bounty in fines while leaving everyone else suffering the consequence of their actions. No, this time, the punishment must fit the crime. The big banks must pay commensurate to the pain and suffering they’ve caused so many people.”

But the truth behind the figure is–as Shahien Nasiripour reports–actually that Elizabeth Warren and Office of the Comptroller of the Currency, headed by John Walsh, are fighting over what an appropriate remedy might be. Warren, along with the FDIC and FHA, believes a still-too-paltry $25-$30 billion penalty is in order.

Officials at the Federal Deposit Insurance Corporation, the Federal Housing Administration, and those now creating a fledgling consumer financial protection bureau are inclined to seek as much as $30 billion in fines, making those funds available to provide relief to borrowers at risk of losing their homes.

[snip]

Elizabeth Warren of the Consumer Financial Protection Bureau has floated a figure of about $25 billion for a unified settlement, according to people familiar with the situation.

But OCC–which has a long history of protecting banksters from actual regulation–wants just a $5 billion penalty with no principal reductions.

The Office of the Comptroller of the Currency, which oversees the nation’s largest banks, intends to pursue its own settlement with lenders, a track distinct from the talks conducted by its federal counterparts, the sources said. The OCC, eager to protect major banks from expensive fines, is seeking to limit the terms to $5 billion, while also ensuring that lenders retain wide latitude in how to administer relief for homeowners, the sources said.

[snip]

Housing experts assert that mortgage companies have been largely unwilling to shrink principal balances on first mortgages, because they understand that that this would trigger huge losses on the second mortgages they own themselves.

The OCC is opposing a settlement that would entail large-scale write-downs of mortgages precisely because of concerns about this very scenario, the sources said.

Problem is, the OCC, as the banskters’ primary regulator enabler, has control of the key documents demonstrating the banksters’ fraud.

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The FDIC Takes Over a Bank

I made a juvenile joke the other day about the Northeast taking over Commerce and Freedom in Georgia. But the reality that banks are being taken over by the FDIC all over the country is no laughing matter.

FDIC allowed 60 Minutes to follow it as it closed down one small bank–watch the YouTube to see how it works (in this case it was fDiC taking over our Heritage, ha ha).

Two things, though. First, notice Sheila Bair’s reaction to two questions: how many more (she didn’t answer, "tons") and why not Citi (she didn’t answer, "we’re not equipped to take over Citi yet"). If I were Sheila Bair, I’d already be having nightmares about FDIC’s upcoming feast on Citi.

As to the latter point, remember this video shows a five branch bank being taken over, and the FDIC stationed 8 FDIC employees at each branch when they did the simultaneous takeover. How many branches does Citi have? This says 1,400, plus 3,800 ATMs. So 8 employees for all 1,400 branches, and the FDIC needs at least 11,200 employees just for the takeover, even before you get to runs on the ATMs and the website and the infrastructure (and given the global reach of Citi, "simultaneous" gets more challenging). I guess that’s why they’re hiring in big ways.

Emptywheel Twitterverse
emptywheel @JessicaValenti Obviously playing with grandkids makes you unable to answer a 3 AM phone call. @emilycrockett
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emptywheel .@shaneharris Rather interesting it specifies Compton.
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bmaz "Justice In The Shitter" RT @carolrosenberg Guantanamo Camp Justice: Rank has privileges. #FOGO #HisandHers @JTFGTMO http://t.co/BgK2V2itWN
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bmaz @JasonLeopold Ferry, but no Roxy?
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bmaz Hey, any attorney friends in or about Ft. Myers FL area, please help @EricMayer out A Serious Request for Assistance http://t.co/3m71nHKadE
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emptywheel @Krhawkins5 Yes. And I believe there were others that bc detainees not charged not given attention. @GitmoWatch @carolrosenberg
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emptywheel @Krhawkins5 Fairly certain if you look beyond lawyers for those who've been charged it's more than that. @gitmowatch @carolrosenberg
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bmaz @Matt_Cagle @FeleciaForAZ Ha! Yeah, but I am not giving Horne $100 for the pleasure, even though it might be a riot to watch the gig.
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bmaz @MarkSZaidEsq @BradMossEsq @Thomas_Drake1 Heh, just checking! Honestly, I think all are entitled to rep+rarely believe good to criticize it.
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emptywheel ICYMI, DOJ IG's investigation into issues w/PATRIOT authorities thru 5 years ago turned 1400 days old this week. http://t.co/bezec4tNNU
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bmaz Why every Arizonan should vote for @FeleciaForAZ for AZ Attorney General (Hint:Horne is in bed with the nuts): http://t.co/v3K5H0veuO
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emptywheel @samknight1 Good good. He owns the facts. He'll know. @onekade
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April 2014
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