As famous Depression-era bank robber John Dillinger once said, “OK, boys; let's go make a withdrawal.” If only bank robberies today were so simple. Over the weekend, the New York Times ran a fascinating account about how J.P Morgan had “descended on Washington … to obtain special breaks that would allow banks to make big bets in their portfolios, including some of the types of trading that led to the $2 billion loss now rocking the bank.” Writes the Times,
Several visits over months by the bank’s well-connected chief executive, Jamie Dimon, and his top aides [including Ina Drew, JPMorgan’s chief investment officer who was just forced out the company] were aimed at persuading regulators to create a loophole in the law, known as the Volcker Rule. The rule was designed by Congress to limit the very kind of proprietary trading that JPMorgan was seeking.…
JPMorgan wasn’t the only large institution making a special plea, but it stood out because of Mr. Dimon’s prominence as a skilled Washington operator and because of his bank’s nearly unblemished record during the financial crisis.
I guess they finally got with the program. And once again, far too many bank customers have been left holding the bag due to banking misconduct. For example, last week:
TD (“Toronto Dominion”) Bank agreed to pay $62 million to settle U.S. lawsuits accusing it of charging customers excessive overdraft fees.
The Canadian lender's TD Bank unit joined Bank of America Corp, JPMorgan Chase & Co and several smaller lenders in settling litigation over the fees, which are usually assessed when customers overdraw their checking accounts.
TD did not admit liability in agreeing to the settlement, which was reached on May 8th, according to a court filing.
The settlement requires approval by U.S. District Judge James Lawrence King in Miami. He oversees overdraft cases against more than 30 lenders that were consolidated in 2009.
Bank of America's $410 million settlement won final court approval last May, and is the largest to date. Other settlements include $137.5 million by Royal Bank of Scotland Group Inc's Citizens Financial unit and $110 million by JPMorgan. Citigroup Inc and Wells Fargo & Co are among the larger banks that have yet to settle.
In Tallahassee last week, the Florida Supreme Court heard a case brought by a homeowner over the practice of “rampant fraud by … lenders” over foreclosure practices. Foreclosure cases have been rife with such practices as ‘robo-signing’ by bank employees who often knew little or nothing about mortgage documents they were hired to sign.” But bank attorney Bruce Rogow argued, “The court has no say in those situations. There is nothing that can be done, and this has been established for years in Florida.” Well in that case ...
And speaking of mortgages, earlier this week, “Deutsche Bank AG (DBK) agreed to pay $202.3 million to settle civil claims that its MortgageIT unit lied to qualify thousands of risky mortgages for a federal insurance program in what the U.S. called a ‘massive fraud.’” Apparently, says the government, “Deutsche Bank and MortgageIT falsely certified that they properly assessed the default risk of borrowers, qualifying loans for insurance by the Housing and Urban Development Department’s Federal Housing Administration. The bank admitted to some of the conduct alleged in the complaint, according to a statement today by the office of U.S. Attorney Preet Bharara in Manhattan. The U.S. sued under the False Claims Act, which permitted it to seek triple damages and penalties. “
Then of course, there’s the federal class action filed in Chicago earlier this month, claiming that “RBS Citizens bank made millions of dollars by taking advantage of customers' math errors: keeping for itself deposits greater than what was written on deposit slips.
Who needs guns?