The too big to fail banks are still in cahoots with their regulators. That’s the message coming loud and clear from the Justice Department’s highly touted $315 million deal with Bank of America to settle racial discriminatory lending charges.
The charges stem from the actions of Countrywide, the subprime lending giant, which was bought by Bank of America after the housing collapse.
The Justice Department’s publicity offensive, labeling the deal “historic” can’t hide the stink emanating from it. Shame on the New York Times for swallowing the Justice Department’s propaganda whole.
The Justice Department concluded that Countrywide charged 200,000 minority borrowers across the country higher rates and fees than white borrowers. Countrywide also steered 10,000 minority borrowers into costlier subprime loans when similar white borrowers got traditional loans.
While $315 million sounds big in a headline, for the bankers, it’s just part of the cost of doing business, less a punishment than the latest favor in the bailout that doesn’t end.
Bank of America, which received $45 billion in bailout funds, admits no wrongdoing in the deal. Victims would get between $1,000 and $1,600 apiece under the deal.
The deal also allows Bank of America to hire its own monitor to keep track of whether the bankers live up to their Justice Department agreement.
Regulators typically whine that they just don’t have the resources to take on the banks at trial.
Regulators argue that they could never get their targets to settlements if they had to wring admissions of wrongdoing from their targets, because those admissions would be used against those targets by other litigants in future lawsuits.
Without the settlements, the crack Justice Department lawyers would be forced to, horror of horrors, try their case in court.
The reasonable response from taxpayers should be: So what? Life is hard. Do your job, which is to hold lawbreakers accountable, not make their lives easier.
The Bank of America deal is only the latest to highlight the lower standard of justice prosecutors have applied to banks. Prosecutors have become part of the government’s team whose main goal Is propping up the banks. Meanwhile, the Obama administration has yet to come up with a decent, functioning program to stem the ongoing fraud in foreclosures, or to help the substantial numbers of homeowners facing foreclosure.
According to news reports, the Justice Department has another six discriminatory lending investigations cooking. This agency would be a good target for future actions
The Bank of America deal also highlights why a strong Occupy movement is needed, outside the traditional political system: neither party, nor the president, will fight for one of the most basic notions of democracy: that lawbreakers, especially the most powerful, should not receive favorable treatment from authorities.
You can read a slightly more sympathetic rundown of the Bank of America deal here, a more skeptical take here.