by Henry Meier
Yesterday was a good day for Alabama and the big banks. For those of you who may have missed it, Alabama crushed the Pontiff’sMaulers42-14 for their second consecutive national championship. It was clear by the end of the first quarter who was going to win the game and by the third quarter, my brother texted me to watch the end of theKnick game, which was much more entertaining, even though they lost.
Yesterday was also the day that thefederal government effectively ended the parole that big banks had been on in this country in the aftermath of the banking induced Great Recession. In the same day, Bank of Americasettledallegationswith Fannie Mae that it had sold them mortgages that did not comply withsecondary market standards; the OCCannouncedit is ending its monitoring of banking foreclosure processes in return for cash payouts to impacted home owners, most of which aren’t large enough to allow these home owners toafford a decent downpayment on a new house, let alone make up for a lost home; and international banking regulators agreed toscale backliquidity regulations that they proposedin 2010 in order to prevent another financial crisis. In contrast, NCUArecently announced its lawsuit against major banks, this time J.P. Morgan, in an attempt to hold them responsible for their own sloppy underwriting standards and the CFPB will most likely be rolling out new mortgage regulations on Thursday.
To anyonewatching the game last nightit quickly became apparent that although Alabama andNotre Dame were playing in thesame game, they didn’t belong on the same field. And anyone who has now taken a serious look at the government’s reaction to banker malfeasance realizes that although community banks, credit unions and the behemothslike J.P. Morgan and Bank of America are treated as if they are playing the same game, they aren’t. At least Notre Dame can get new recruits. Butcredit unionshave to abide by mortgageregulations that are going to make it more expensive for smaller institutionsto offer homes to their members while the institutions that necessitated these regulations in the first place will either have the expertise and resourcesto deal with these regulations or they will simply work behind the scenes to get them watered down.
