Welcome to the United States of the Bank of America. Forget the President, Congress and Supreme Court – all signs point to the big banks really having the power in the U.S. Here’s the evidence:
1. Banks Write the Laws
You know how U.S. citizens are clamoring for better laws to regulate the dastardly banks? Well, who better to write these new laws than the banks themselves? Last week, the House Financial Services Committee approved a bill that was almost entirely written by Citibank. 70 of the bill’s 85 lines were taken from Citibank’s suggested legislation. After all, why should Congress do its job to draft meaningful reform when private interest lobbyists are happy to do it for our elected officials?
As Neil Barofksy, who served as the Treasury Department’s Special Inspector General during the bank bailouts, points out, banks crafting legislation is hardly new. “It’s only surprising in that we don’t learn from our mistakes and history just repeats itself,” he says.
2. Banks Don’t Follow the Laws
Hey, they’re the ones writing the laws… you don’t honestly expect them to have to actually follow these rules, too, do you? When one study found that 1 out of 4 Wall Street executives claimed that breaking the law was actually “necessary” in order to run their businesses, that should give everyone an idea of how the banks view the law of the land.
Why bother to follow the law when they’re not on the hook, anyway? Corporate tax loopholes allow large banks to simply write off any settlements they should have to pay for their wrongdoing. Believe it or not, these fines are considered a “deductible corporate expense” come tax time, so the punishments end up being inconsequential.
3. Bankers Are Too Big to Jail
We’ve all heard that not a single Wall Street bigwig has gone to jail for their numerous crimes (while thousands of protesters have been arrested for pointing out this fact). Finally, Attorney General Eric Holder gave the United States an explanation for this lack of prosecution. What was once just assumed is now an acknowledged fact: the Department of Justice has considered the potential economic impact of pressing criminal charges against bankers and decided against it.
I seem to recall a point in recent years when these same banks’ illegal practices really did cause an economic collapse. So how does sending someone to prison make the situation any worse? Holder’s words also send a clear message to banks that they can do whatever they want in the future. Too big to fail also means too big to jail. When the U.S. government is scared of YOU, that’s a sign that you’ve got the power in the situation.
4. The Government Keeps the Banks’ Secrets
Despite having a President who has promised unprecedented transparency, the banks’ dealings with the government have been kept pretty hush-hush. David Barr, an FDIC spokesman, said that they don’t reveal most of the private settlements with banks after they do wrong, but “declined to discuss the legal strategy behind the Deutsche Bank deal and other no-press-release agreements.”
The obvious theory would be the government is protecting the banks by limiting the public from understanding the extent of their wrongdoing. Furthermore, the government is also probably protecting itself from having to reveal the minuscule slap-on-the-wrist fines it imposes for these major infractions.
5. Banks Are Hijacking Citizen’s Property
Have you stopped by to welcome the new homeowners in your neighborhood yet? Probably not: they’re the banks. So far the banks have foreclosed on (and now own) 1.5 million homes across the country. It’s a number that continues to rise, particularly with foreclosure looming for an additional 11 million homeowners who owe the banks more than their houses’ actual value.
What’s worse is that the majority of the bank foreclosures are conducted improperly if not outright fraudulently. Still, the government has done more to protect the banks for this shady practice than its newly homeless citizens who are powerless with little legal recourse even when the banks are at fault. It turns out that the recent legislation that was purportedly designed to prevent the underhanded foreclosures still includes plenty of loopholes for the banks to do it anyway.