Banks have a new image. Now you have ‘a friend,’ your friendly banker. If the banks are so friendly, how come they chain down the pens?
Don’t blame me, the bumper sticker goes, I bank locally. Even better, I bank at a credit union, a credit union with a funny name. It wasn’t responsible for bringing the financial sector to its knees like some banks (cough, cough Bank of America). My bank was even solid during the savings & loan crisis of the late 1980s. There are probably a few people making a good living at my bank, but I’m sure they aren’t raking it in like Robert Rubin or some of those guys advising the President.
I can see how banks don’t want to settle with all the states for improperly foreclosing on houses. I mean they are there to make a profit, right? Attorneys General can be a real pain in the neck for them. AG’s operate at the state level where you can still get things done.
Maybe there’s a good reason the Obama Administration is pandering to the bankers. Maybe he needs their money for re-election. I don’t know, but it’s kind of dispiriting to read this in the The New York Times:
Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.
In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.
Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.
But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general’s participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation.
If you read his Wikipedia bio, Schneiderman seems like a pretty consumer-friendly guy. Kind of Elizabeth Warrenesque. So why is the White House giving him a hard time? It was Treasury Secretary Tim Geithner and Larry Summers love bankers and those who love them. It was they who persuaded Chris Dodd to include the loophole in TARP legislation that allowed AIG execs to collect big bonuses.
Gene Sperling, currently a counselor to Geithner,
was a principal negotiator with then-Treasury Secretary Lawrence Summers of the Financial Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act. Gramm-Leach-Bliley repealed large portions of the depression-era Glass-Stegall Act allowing banks, securities firms and insurance companies to merge.
Economists from Robert Ekelund and Mark Thornton to Joseph Stiglitz and Paul Krugman blame the repeal of the post-Depression Glass-Steagall act for the financial meltdown of 2007.
I can’t believe this won’t be used effectively against Obama in the election.