The original article written by Tom Schoenberg can be found at: https://www.bloomberg.com/news/2014-10-07/u-s-prosecutor-masterminded-37-billion-bank-penalty-win.html
In many ways, the settlements reached with JPMorgan, Citigroup and Bank of America are good tidings. For a brief moment, there appears to be justice for the hundreds of thousands of families who lost their homes during the housing crisis. The banks have been held accountable for their dubious practices and must pay their comeuppance. It’s almost reassuring to the American people.
Will these hefty penalties be enough to deter the aforementioned banks—and any other banks that dare to follow in their footsteps—from any further misdeeds?
Unfortunately, the perfect storm of events that resulted in the colossal fiasco that was the housing crisis does not seem to be able to be traced to one single domino that set off the chain reaction that brought us where we are today. Not one that can be addressed in a Court of law, anyway.
Schoenberg’s article goes on to mention the current suit against S&P which alleges that, “S&P set aside its objectivity so it could cash in on the mortgage boom.” If the allegations hold any water then the American people have a little more to be concerned about.
Further, the Justice Department didn’t seem to make a priority of holding accountable those responsible for the financial crisis. As Schoenberg stated in his article,”…the Justice Department had been pilloried for years for not having brought significant cases against banks and their executives.”
It’s almost as if the Justice Department was badgered into taking action, and didn’t do so of its own volition. And again, while the penalties that were agreed to in the subsequent settlements appear to be a victory the reality is that no one –company or individual–has actually had their feet put to the fire and held accountable. The truth is that although the settlements sound very large and imposing, these billion dollar figures are nothing to the big banks.
To quote a common saying “Fool me once, shame on you. Fool me twice, shame on me.”
Are we, as a country, setting ourselves up to be fooled again?