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.

Continue reading

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
bmaz John Cusack caught Terror Tunnelling to China
4hreplyretweetfavorite
bmaz I am just catching up, but did @erinscafe try to draw a bubble bath in Pauley Pavilion?? http://t.co/Ngh2GFdlwh
4hreplyretweetfavorite
bmaz @robertcaruso Well fireworks are excellent from a date; explosives maybe not so much.
4hreplyretweetfavorite
bmaz @robertcaruso Rob, sailors don't date sailors, you need a Marine.
4hreplyretweetfavorite
bmaz Frankly I am SHOCKED @emptywheel has not been agitating about the awesome Diana Taurasi, Brittney Griner and Phoenix Mercury. #SlackinSister
5hreplyretweetfavorite
bmaz Y'all go read latest Border story from @DcBigJohn "Border Patrol Agent Charged In $60,000 Money-Laundering Scheme" http://t.co/AZUki3asSj
6hreplyretweetfavorite
JimWhiteGNV RT @onekade: Dude should be facing war crimes charges and yet there he goes, blabbing his ugly face off on tv, rewriting history http://t.c…
6hreplyretweetfavorite
JimWhiteGNV RT @teddysanfran: @onekade Hey Betrayus? Who trained that Iraqi army that shed its uniforms and ran away? Wasn't that YOU?
6hreplyretweetfavorite
JimWhiteGNV Vin Scully is a national treasure. Dodger fans are so lucky to get him again next year.
6hreplyretweetfavorite
emptywheel LOL: Bush schooling Maliki the art of politics. Obama lost Iraq, you know.
6hreplyretweetfavorite
emptywheel As you watch this Frontline piece, remember Dick Cheney still had his own heart back then. With a pulse and everything.
6hreplyretweetfavorite
emptywheel RT @sarahjeong: will parody your favorite new york times columnist for a burrito
6hreplyretweetfavorite
July 2014
S M T W T F S
« Jun    
 12345
6789101112
13141516171819
20212223242526
2728293031