Posts Tagged ‘too big to fail’

Speaker Pelosi and 30 California Democrats: “Banks Need To Be Held Accountable.”

Today, Speaker Pelosi and 30 California Democrats told the justice department that “it is time that the banks were held accountable for their practices.” Really? You guys are just figuring this out? Wow, Congress is sure slow on the uptake…or maybe it’s all that Goldman Sucks money flowing into the pockets of elected officials that’s clogging up their brains.

Let’s see: over the past two years, we have seen the foreclosure rate continue to rise and hundreds of thousands of Americans have been kicked out of their homes in spite of programs designed to help them. Going through the HAMP process is a nightmare in and of itself, aside from the trauma of foreclosure itself, because the banks just don’t want to cooperate. They won’t even cooperate on short sales most of the time! Recently, we’ve had the Ally Bank signature debacle and another company, Lender Processing Services (LPS) has been in the news lately because apparently they’ve been having their employees sign authorized employees’ signatures to foreclosure documents.

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Financial Reform Passes In Senate, Long Fight Remains Ahead

The financial reform bill has passed in the Senate, which includes the Consumer Finance Protection Agency, the brainchild of Elizabeth Warren, head of the TARP Oversight Panel, Harvard law professor, and bankruptcy expert.

The fight is not over, however, and the financial services industry hasn’t stopped working hard to weaken the final bill.  Robert E. Story, Jr., Chairman of the Mortgage Bankers Association released a statement today that remains inline with previous statements:

Unless improvements are made during the Senate-House negotiations, this bill will likely bring regulations that will only further constrain credit for borrowers, make real estate purchases more expensive and drag out the ongoing turmoil in the real estate markets.

The financial services industry doesn’t like the reform bill one bit. They don’t like the fact that they face new rules that limit their ability to gouge consumers. The sad truth is they really don’t have much to fear, at least from the Senate version of the bill. While it does do some things that are good,  among them, the audit of the Fed, and the creation of the CFPA, it doesn’t reinstate the Glass-Stegall Act,  nor does it address “too big to fail.” You can bet that they’re going to fight to further weaken the CFPA, too, because after all, too much consumer protection is a BAD thing.

 

If_Anti-CFPA_Folks_Ran_Toyota_Today_by_crlonline

Source image: http://pixton.com/comic/gl8jabmu

Too Big To Fail Failed In The Senate 61-33

goldman_sachs

 

Well, there can no longer be any doubts that the Senate is firmly in the pockets of the big banks. Once again, they’ve proven completely unwilling to do what good governance and the lessons of history suggest they must.

Today an amendment to the financial reform bill, sponsored by Senators Sherrod Brown of Ohio and Ted Kaufman of Delaware that would have required the big banks to be broken down into smaller and more manageable institutions failed by a vote of 61 to 33.

Not that I really thought ending “too big to fail” had a chance, but I thought the vote would be narrower than that. There are way too many senators who are responding to the wishes of their campaign donors and not to the needs of their constituents.

Too Big To Fail? Too Big To Exist!

 

Some facts to ponder from Senator Sanders’ remarks:

  • The four largest banks issue two-thirds of United States credit cards
  • The four largest banks make half of all U.S. mortgages
  • The four largest banks hold forty percent of bank deposits and $7.4 trillion dollars in assets.

In the late 19th and early 20th centuries, our government passed the Sherman and Clayton Acts, which were aimed at ensuring a competitive environment in which the free market can operate. Standard Oil, which at one point, controlled 91% of production and 85% of final sales of oil, was broken up because it was too big.  More recently, AT&T was forced as part of a legal settlement, to break up into smaller companies. It held a sanctioned monopoly over telephone service for many years.

Over the past thirty years, our anti-trust laws have been largely ignored. If there was ever a time when they need to be dusted off and put into action again it is now. The banks control too much of the United States and their folly has hurt not only the U.S. economy , but the global economy as well.

What do you think? Is it time to break up the banks?

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