JPMorgan, RBS Sued by Federal Agency Over Mortgage Bonds

[boutons_deux]

Lender proves to be a costly buy for Bank of America

Countrywide Financial Corp. turns out to be a huge miscalculation as red ink keeps flowing. The bank added $20.4 billion this week in expected costs to the tally.

E. Scott Reckard, Los Angeles Times

June 30, 2011

When Bank of America Corp. acquired mortgage giant Countrywide Financial Corp. three years ago this week, cementing BofA's position as a consumer banking leader, the purchase price was a measly $2.5 billion in stock.

But the real cost could easily be 10 to 15 times that amount after the home lender incurred huge losses under BofA's ownership and the bank agreed to pay billions of dollars to settle litigation over bad loans made by Countrywide during the housing boom. On Wednesday alone, the bank added $20.4 billion in expected costs to the tally.

The mounting numbers have made the acquisition of Countrywide one of the most misguided takeovers in the history of banking, analysts say.

"The worst by a mile," FBR Capital Markets analyst Paul Miller said — or at least the worst since he began following the industry in 1992.

When the Charlotte, N.C., bank agreed in January 2008 to buy Countrywide, the nationwide mortgage meltdown was well underway in the wake of surging defaults on subprime and other high-risk loans written by the Calabasas company and other lenders.

Shortly after the takeover was completed the following July 1, Kenneth Lewis, BofA's chief executive at the time, acknowledged that Countrywide's losses were running at the high end of what his staff had projected.

But because accountants had aggressively written down the value of Countrywide's assets before transferring them to BofA's books, Lewis predicted the combined home-loan business, consisting mostly of Countrywide's operations, would immediately show a profit — and could see huge earnings growth once the mortgage industry recovered.

Instead, the unit has bled about $16 billion in red ink since the Countrywide takeover — with no real industry recovery in sight.

The $20.4 billion in bad news disclosed Wednesday includes $8.5 billion in payouts to 22 ins utional investors to settle demands that Bank of America repurchase bonds backed by Countrywide mortgages. An additional $5.5 billion is to beef up reserves for similar demands by other investors.

The bank also said it would record $6.4 billion in additional mortgage-related charges for the second quarter. That amount includes a $2.6-billion write-off of its Countrywide investment and expenses for revising its mortgage-servicing operations to comply with orders from the Federal Reserve and the Office of the Comptroller of the Currency, which regulates national banks.

The Fed and the comptroller's office were acting in response to revelations that Bank of America and other large mortgage servicers had cut corners in their handling of troubled borrowers, including "robo-signing" do ents supporting foreclosures without having the signers actually verify the information.

A coalition of state attorneys general and federal officials are negotiating a separate, broader settlement of the foreclosure fiasco with Bank of America and four other big banks that are major mortgage servicers.

Those authorities, who began their investigation in October, met with the servicers last week but were unable to reach an agreement with the banks on the penalty they must pay, a spokesman for Iowa's attorney general said. Estimates of the total to be paid by the five banks have ranged from $5 billion to $20 billion.

BofA said the newly announced costs meant it would report a net loss of $8.6 billion to $9.1 billion for the second quarter, instead of a profit of $3.2 billion to $3.7 billion. Wall Street seemed to breathe a sigh of relief that things weren't even worse. Bank of America shares ended the day up 32 cents, or 3%, at $11.14.

The new Countrywide-related costs are in addition to these previously announced items, some of which contributed to the operating losses at BofA's mortgage unit since the takeover:

A 2008 settlement with California to cut payments by as much as $8.6 billion on mortgages that state officials said were abusive.

A 2010 accord to forgive as much as $3 billion in principal for severely delinquent Countrywide borrowers in Massachusetts who owed more on their mortgages than their homes were worth.

An agreement last year to pay $600 million to former Countrywide shareholders to settle a securities-fraud lawsuit.

An agreement in April to pay $1.1billion to mortgage insurer Assured Guaranty Ltd. related to losses on Countrywide loans.

More than $6 billion in payments to government-controlled loan buyers Fannie Mae and Freddie Mac to settle demands for buybacks of flawed home loans.

Bank of America can take some consolation, however small, in the fact that it paid for Countrywide entirely with BofA stock.

When it agreed to the deal in January 2008, those shares were valued by the stock market at $4 billion. When the transaction closed, their value had fallen to $2.5 billion as the global financial crisis had intensified. They are now worth about $1.2 billion.

http://www.latimes.com/business/real...26,print.story

==========

So it was a bad deal, a bad mgmt decision, so the board punished the mgmt with reduced bonuses?

[boutons_deux]

J.P. Morgan to pay $228 million for bond bid-rigging scheme

US bank JP Morgan Chase was slapped with fines and repayment penalties of $228 million for a bid-rigging scheme that shortchanged issuers of municipal bonds, US authorities announced Thursday.

In a case that has also seen Swiss bank UBS and Bank of America heavily fined, JP Morgan admitted that employees of JP Morgan Securities (JPMS) conspired to manipulate the bidding process for the right to handle the proceeds of billions of dollars in muni bond auctions between 2001 and 2006.

The payout covers penalties, res ution of $51.2 million to the affected borrowers and disgorgement of profits on the deals, according to the Department of Justice and the Securities and Exchange Commission.

In parallel agreements with state and federal authorities, the company avoided being legally prosecuted on the charges while admitting to anticompe ive conduct.

Eighteen former employees of banks and financial service firms have been hit with criminal charges in the scheme, and nine have pleaded guilty, including former JP Morgan executive James Hertz, the Justice Department said in a statement.

JP Morgan's involvement in the ring tied it to at least 93 bids which were fraudulently fixed in 31 states, according to the SEC.

http://www.rawstory.com/rs/2011/07/0...e+Raw+Story%29

=============

ers, ripping off taxpayers for fun and profit and bonuses and stock price rises/dividends to capitalists.

Do these fines come anywhere close to nullifying the ripoffs JPM and friends pocketed?

I always assume that these cases represent only a tiny fraction of what's really going on.

But taxing these kleptocratic assholes is "stealing" --- WC

[boutons_deux]

BofA to take $13 billion more in charges: Bernstein

Bank of America will take another $13 billion in charges related to pending settlement with private label mortgage-backed securities investors, Sanford C Bernstein said.

A group of public pension funds and a group of bondholders have challenged Bank of America Corp's $8.5 billion settlement with holders in soured mortgage-backed securities, which the bank expects will result in $20 billion of charges and a second-quarter loss.

The bank was hit hard by toxic home loans after BofA bought mortgage lender Countrywide Financial in 2008, just as the housing market bubble was bursting, ensuing billions of dollars in losses.

http://www.reuters.com/article/2011/...2F+Top+News%29

[boutons_deux]

As Wall St. Polices Itself, Prosecutors Use Softer Approach

As the financial storm brewed in the summer of 2008 and ins utions feared for their survival, a bit of good news bubbled through large banks and the law firms that defend them.

Federal prosecutors officially adopted new guidelines about charging corporations with crimes — a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis.

Though little noticed outside legal circles, the guidelines were welcomed by firms representing banks. The Justice Department’s directive, involving a process known as deferred prosecutions, signaled “an important step away from the more aggressive prosecutorial practices seen in some cases under their predecessors,” Sullivan & Cromwell, a prominent Wall Street law firm, told clients in a memo that September.

The guidelines left open a possibility other than guilty or not guilty, giving leniency often if companies investigated and reported their own wrongdoing. In return, the government could enter into agreements to delay or cancel the prosecution if the companies promised to change their behavior.

But this approach, critics maintain, runs the risk of letting companies off too easily.

“If you do not punish crimes, there’s really no reason they won’t happen again,” said Mary Ramirez, a professor at Washburn University School of Law and a former assistant United States attorney. “I worry and so do a lot of economists that we have created no disincentives for committing fraud or white-collar crime, in particular in the financial space.”

While “deferred prosecution agreements” were used before the financial crisis, the Justice Department made them an official alternative in 2008, according to the Sullivan & Cromwell note.

It is among a number of signs, white-collar crime experts say, that the government seems to be taking a gentler approach.

http://www.nytimes.com/2011/07/08/bu...gewanted=print

========

The kleptocratic plutocracy has dictated to its subsidiary, govts at all levels, to back off and let them rape and pillage at will without serious punishments, if any at all.

[boutons_deux]

JP Morgan Chase Fine: Another Slap on the Wrist for Wall Street

This is one of the best examples we’ve had yet of the profound difference in the style of criminal justice enforcement for the very rich and connected, versus the style of justice for everyone else. This scam that Chase, Bank of America and UBS were involved with was no different in any way, really, from old-school mafia-style bid-rigging scams.

What these banks did is they got together and carved up territory between them, arranging things so that they wouldn’t be bidding against each other in municipal debt auctions. That means the 18 different states involved in these 93-odd deals all got screwed out of the best prices, leaving the taxpayers in those places severely overcharged for their public borrowing.

This is absolutely no different from what mafia groups in New York used to (and probably still do) do for public contracts – the proverbial five families would get together, divide up the boroughs and neighborhoods between them, and each family would individually buy or intimidate their way into the bidding process, corrupting the game so that the public had to overpay for their garbage collection or their construction labor or whatever. The only difference here is that we’re talking about debt, not garbage. But the concept is exactly the same; it’s the same crime.

If Khuzami’s defendants had been a bunch of Italians from Howard Beach, they would be facing RICO charges and would be looking at years in prison, plus seizure of all their ill-gotten gains, in addition to civil suits and penalties.

http://www.rollingstone.com/politics...708?print=true

[Winehole23]

Chicago Trading Firm’s Lawsuit Claims Banks Conspired to Manipulate Libor

Q
By David Voreacos - Jul 7, 2011 4:33 PM CT Thu Jul 07 21:33:21 GMT 2011

A Chicago trading firm accused Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM), UBS AG (UBSN) and Citigroup Inc. (C) of conspiring to manipulate the London interbank offered rate.





The banks drove down Libor to generate billions of dollars in profits from swaps, loans, interest rate derivatives and other financial instruments whose value depended on the rate, Eldorado Trading Group LLC said in a complaint filed July 5 in federal court in Newark, New Jersey.



The civil lawsuit is one of several filed in response to probes by the U.S. Justice Department, Securities and Exchange Commission and Commodity Futures Trading Commission related to whether there were improper attempts to manipulate Libor. The rate, at which banks borrow from one another in the London interbank market, is a short-term, international benchmark.



The banks “had a substantial incentive to manipulate, and in fact did manipulate, Libor downward, in order to increase the income from its interest rate derivatives and similar instruments,” according to Eldorado’s complaint. “This manipulation resulted in billions of dollars in revenue.”



Eldorado owned futures and options contracts based on Eurodollar deposits traded on the Chicago Mercantile Exchange from August 2007 to December 2009, according to the complaint. It seeks to represent similar owners of contracts traded on the Chicago exchange.



U.S. Probes



Karina Byrne, a UBS spokeswoman, said the Zurich-based bank is cooperating with the U.S. probes, and has also gotten requests for information from the Japan Financial Services Agency and the U.K. Financial Services Authority.
“We believe this suit is without merit,” Danielle Romero- Apsilos, a spokeswoman for New York-based Citigroup, said in an e-mail.



Lawrence Grayson, a spokesman for Charlotte, North Carolina-based Bank of America, declined to comment. Jennifer Zuccarelli, a spokeswoman for New York-based JPMorgan, declined to comment.



The case is Eldorado Trading Group LLC v. Bank of America Corp., 11-cv-3847, U.S. District Court, District of New Jersey (Newark).

[boutons_deux]

Let's not tax the wealthy just because they work so hard and are so honest. They deserve every penny they steal.

[Winehole23]

hehe

[boutons_deux]

Florida Foreclosure Fraud Investigators Allege Attorney General Fired Them For Aggressively Pursuing Banks



Former Assistant Attorney General Theresa Edwards and colleague June Clarkson had been investigating the state’s so-called “foreclosure mills,” uncovering evidence of legal malpractice that also implicated banks and loan servLuck_The_Fakers_icers. Despite positive performance evaluations, Edwards said the two were told during a meeting with their supervisor in late May to give up their jobs voluntarily or be let go. Edwards said no reason was given for the move.

“It all happened very abruptly,” said Edwards, who had worked in the attorney general’s office for about three years. The foreclosure investigations were launched under former Attorney General Bill McCollum, but Edwards said she sensed changes were coming under Gov. Rick Scott and Attorney General Pam Bondi. “I think they wanted to put people in there that were more in line with their thinking,” Edwards said.

According to data collected from the National Ins ute On Money In State Politics, Bondi received $57,500 from the securities and investment industries and $150,925 from the real estate industry during her last election campaign.

http://thinkprogress.org/economy/201...ursuing-banks/

========

the financial/realestate sectors own the pretty

[boutons_deux]

California AG Considering Joining New York, Delaware in Broad Probe of Mortgage Abuses

We’d said the 50 state attorneys general settlement was wobblier than the press cheerleading would lead you to believe. We’ve also said the California AG, Kamala Harris, was likely to be among the defectors. The odds of that increased today as she met with New York AG Eric Schneiderman to discuss joining the probe that he and Delaware AG Beau Biden have launched, which is the most extensive investigation undertaken to date.

It isn’t hard to see why the settlement talks are fracturing. Many AGs are unhappy with Tom Miller’s failure to keep them in the loop, the lack of meaningful investigations, and the high odds that the banks will get a broad waiver, which is tantamount to a big “get out of liability free card”. If you have any doubts whose interests are served by these negotiations, Jamie Dimon, in an investor conference call Wednesday, said he “would do anything to get it done today.” And no wonder why. He also said, per Bloomberg:

There have been so many flaws in mortgages that it’s been an unmitigated disaster…We just really need to clean it up for the sake of everybody. And everybody is going to sue everybody else, and it’s going to go on for a long time.

Given that California was one of the states worst hit by the mortgage meltdown, its abstention from a settlement deal would have a disproportionate impact. Politically, the fact that the states that have exited and appear likely to exit have Democratic AGs is also more of a blow to the Administration, which has been involved in the negotiations that Republican defections would be.

From the Los Angeles Times (hat tip Lisa Epstein):

California Atty. Gen. Kamala Harris met with New York Atty. Gen. Eric Schneiderman on Thursday in San Francisco to discuss cooperating on the investigation, which is already one of the broadest to probe how banks encouraged the financial crisis through the creation of risky financial instruments backed by mortgages.

New York and Delaware have more than a dozen attorneys working full time on the effort and have subpoenaed or requested information from 13 financial firms, including Goldman Sachs and JPMorgan Chase & Co., according to people familiar with the investigation. The people spoke on condition of anonymity because of the sensitivity of the investigation…

Biden and Schneiderman have separate but parallel investigations into the matter and have signed an agreement to share information, people familiar with the cases said.

We’d said the 50 state attorneys general settlement was wobblier than the press cheerleading would lead you to believe. We’ve also said the California AG, Kamala Harris, was likely to be among the defectors. The odds of that increased today as she met with New York AG Eric Schneiderman to discuss joining the probe that he and Delaware AG Beau Biden have launched, which is the most extensive investigation undertaken to date.

It isn’t hard to see why the settlement talks are fracturing. Many AGs are unhappy with Tom Miller’s failure to keep them in the loop, the lack of meaningful investigations, and the high odds that the banks will get a broad waiver, which is tantamount to a big “get out of liability free card”. If you have any doubts whose interests are served by these negotiations, Jamie Dimon, in an investor conference call Wednesday, said he “would do anything to get it done today.” And no wonder why. He also said, per Bloomberg:

There have been so many flaws in mortgages that it’s been an unmitigated disaster…We just really need to clean it up for the sake of everybody. And everybody is going to sue everybody else, and it’s going to go on for a long time.

Given that California was one of the states worst hit by the mortgage meltdown, its abstention from a settlement deal would have a disproportionate impact. Politically, the fact that the states that have exited and appear likely to exit have Democratic AGs is also more of a blow to the Administration, which has been involved in the negotiations that Republican defections would be.

From the Los Angeles Times (hat tip Lisa Epstein):

California Atty. Gen. Kamala Harris met with New York Atty. Gen. Eric Schneiderman on Thursday in San Francisco to discuss cooperating on the investigation, which is already one of the broadest to probe how banks encouraged the financial crisis through the creation of risky financial instruments backed by mortgages.

New York and Delaware have more than a dozen attorneys working full time on the effort and have subpoenaed or requested information from 13 financial firms, including Goldman Sachs and JPMorgan Chase & Co., according to people familiar with the investigation. The people spoke on condition of anonymity because of the sensitivity of the investigation…

Biden and Schneiderman have separate but parallel investigations into the matter and have signed an agreement to share information, people familiar with the cases said.

http://www.nakedcapitalism.com/2011/...ge-abuses.html

[boutons_deux]

Quelle Surprise! The Banks Lied and Robosigning Lives!

14 major servicers then swore in consent orders earlier this year that they’d stop doing all that bad stuff. But with compliance weak (the banks get to hire the overseers!), they appear to have decided they don’t need to change their ways all that much. Indeed, the record of consent orders is underwhelming; for instance, both Nevada and Arizona are suing Countrywide for violations of past agreements.

Two stories were published yesterday, one a long form Reuters investigation (hat tip April Charney), the other a shorter report by AP (hat tip Lisa Epstein and Daniel Pennell). First from Reuters:

Reuters has found that some of the biggest U.S. banks and other “loan servicers” continue to file questionable foreclosure do ents with courts and county clerks. They are using tactics that late last year triggered an outcry, multiple investigations and temporary moratoriums on foreclosures.

In recent months, servicers have filed thousands of do ents that appear to have been fabricated or improperly altered, or have sworn to false facts.

Reuters also identified at least six “robosigners,” individuals who in recent months have each signed thousands of mortgage assignments — legal do ents which pinpoint ownership of a property. These same individuals have been identified — in depositions, court testimony or court rulings — as previously having signed vast numbers of foreclosure do ents that they never read or checked.

So…the banks have perjured themselves, made commitment to regulators that they are brazenly violating. The Reuters investigation determined that at least 5 of the 14 servicers that signed consent decrees in April are not complying with their requirements: OneWest, Bank of America, HSBC, Bank USA, Wells Fargo and GMAC Mortgage. Note that three of them (Bank of America, Wells, and GMAC, now Ally) are among the five biggest servicers, so the impact is greater than the number of derelicts suggests. And one is the annoyingly pious Wells, which keeps maintaining, contrary to all evidence, that it is better than the other servicers. In addition, another six servicers that did not sign the consent orders were also found by the Reuters exam to have engaged in abusive practices.

The AP report found that servicers were continuing to generate do ents signed by well-known robosigners, including the notorious Lisa Greene. This seems to be asking to be caught out.

http://www.nakedcapitalism.com/2011/...+capitalism%29

[boutons_deux]

Mortgage 'Robo-Signing' Goes On

Mortgage industry employees are still signing do ents they haven't read and using fake signatures more than eight months after big banks and mortgage companies promised to stop the illegal practices that led to a nationwide halt of home foreclosures.

County officials in at least three states say they have received thousands of mortgage do ents with questionable signatures since last fall, suggesting that the practices, known collectively as "robo-signing," remain widespread in the industry.

The do ents have come from several companies that process mortgage paperwork, and have been filed on behalf of several major banks. One name, "Linda Green," was signed almost two dozen different ways.

Lenders say they are working with regulators to fix the problem but cannot explain why it has persisted.

http://finance.yahoo.com/news/AP-Exc...239330433.html

=======

It has "persisted" because all y'all ing criminal bankers are raping due process of property law, the fundamental law of society, "because you can", and no govt has the interest or policing power to tackle such a huge, widespread crime.

When are the tea baggers gonna jump on the banks? And why haven't they jumped on the banks? Maybe because the tea baggers aren't legit protesters but astro-turf assholes organized and financed by the wealthy to harass the banks' only potential countervailing power?

[boutons_deux]

If you're forgetting who gave us the Banksters' Great Depression, here's some of the criminals:

Wells Fargo Fined $85 Million By Fed Over Its Subprime Mortgage Lending Practices

In its largest consumer protection enforcement action ever, the Federal Reserve today slapped an $85 million penalty on Wells Fargo, a bank scrutinized for pushing subprime loans on borrowers who qualified for lower prime lending rates. According to the official press release, Wells Fargo received the order both for its strong-arming of borrowers into subprime loans and for falsifying income information on mortgage forms. In addition to the civil fine, the Federal Reserve mandated that the mega-bank compensate those borrowers who were adversely affected, estimated to number “between 3,700 and possibly more than 10,000.” Wells Fargo received $25 billion in the taxpayer-funded bailout.

http://thinkprogress.org/economy/201...fined-lending/

http://www.federalreserve.gov/newsev.../20110720a.htm

======

And still, not a peep out the tea baggers against the financial sector.

$85M? How much did Wells-Fargo pocket from these 1000s of screwed customers?

[Winehole23]

A pittance for a crime like that. Men should hang lest others take encouragement.

[boutons_deux]

Audit: Fed gave $16 trillion in emergency loans

The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial ins utions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government's first-ever audit of the central bank.

Last year, the gross domestic product of the entire U.S. economy was $14.5 trillion.

Of the $16.1 trillion loaned out, $3.08 trillion went to financial ins utions in the U.K., Germany, Switzerland, France and Belgium, the Government Accountability Office's (GAO) analysis shows.

Additionally, asset swap arrangements were opened with banks in the U.K., Canada, Brazil, Japan, South Korea, Norway, Mexico, Singapore and Switzerland. Twelve of those arrangements are still ongoing, having been extended through August 2012.

Out of all borrowers, Citigroup received the most financial assistance from the Fed, at $2.5 trillion. Morgan Stanley came in second with $2.04 trillion, followed by Merill Lynch at $1.9 trillion and Bank of America at $1.3 trillion.

The audit also found that the Fed mostly outsourced its lending operations to the very financial ins utions which sparked the crisis to begin with, and that they delegated contracts largely on a no-bid basis. The GAO report recommends new policies that would eliminate such conflicts of interest, and suggests that in the future the Fed should keep better records of their emergency decision-making process.

http://www.rawstory.com/rs/2011/07/2...e+Raw+Story%29

[boutons_deux]

Is Bank of America At Risk of a Death Spiral?

First, the bank has been overly optimistic. It refused to write down $4.4 billion of goodwill from Countrywide until late last year, and maintained it would only suffer $4.4 billion [yes, the same number] in mortgage-related losses, then wrote off $19.2 billion more last quarter. Second, the bank appears to be in denial:

The crucial question today is whether Bank of America needs fresh capital to strengthen its balance sheet. Moynihan emphatically says it doesn’t, pointing to regulatory-capital measures that would have us believe it’s doing fine. The market is screaming otherwise, judging by the mammoth discount to book value. Then again, for all we know, the equity markets might not be receptive to a massive offering of new shares anyway, even if the bank’s executives were inclined to try for one.

Weil correctly depicts BofA as a systemic risk. And this confirms a point made by critics of so-called financial reforms, including yours truly, that the banks were not dealt harshly enough in the crisis

And let us tell you a dirty secret: while Bank of America, thanks to Countrywide, is patient zero of the housing mess, Wells is next in line. Residential real estate is proportionately even bigger relative to the bank’s earnings and balance sheet, its accounting has been somewhere between aggressive and misleading, and despite its pious claims otherwise, it is no better than any of the other big banks

http://www.nakedcapitalism.com/2011/...+capitalism%29

[boutons_deux]

Moot point, because Wall St and Repugs have completely gutted CPFB and Wall St nixed Warren, and will probably nix the nominee, and will gut it further, with the Repugs totally underfunding/defunding it.



New Poll: Americans Overwhelmingly Support Consumer Financial Protection Bureau

Likely voters, including majorities of Independents, Democrats, and Republicans, favor the 2010 Dodd-Frank Wall Street Reform law by a 5 to 1 margin (71% vs. 14%).

Presented with information about challenges in Congress to the law, almost two-thirds (63%) believe that policymakers should allow the law to be fully implemented.

Three-quarters (74%) of voters support the existence of a single en y with the mission of protecting consumers from deceptive practices.


http://www.alternet.org/newsandviews...ection_bureau/

[Winehole23]

And let us tell you a dirty secret: while Bank of America, thanks to Countrywide, is patient zero of the housing mess

Hardly a secret by now.

[boutons_deux]

SEC Denied Rule Making It Easier For Shareholders To Exercise Control Over Corporate Boards

- A U.S. appeals court has rejected a new Securities and Exchange Commission rule intended to make it easier for shareholders to nominate directors to corporate boards.

In a major blow to the SEC, the U.S. Court of Appeals for the District of Columbia Circuit said the SEC's rule was "arbitrary and capricious" and that the agency had failed to properly weigh the economic consequences.

Friday's ruling marks the first successful legal challenge to a provision in last year's Dodd-Frank financial overhaul law which was intended to curb Wall Street excesses leading up to the global financial crisis.

The SEC rule, which had been put on hold pending the outcome of this case, would have required companies to include a shareholder candidate on corporate ballots known as proxies -- provided that the nominating shareholders held at least 3 percent of the voting power in the corporate stock for three years.

http://www.huffingtonpost.com/2011/0...comm_ref=false

[boutons_deux]

Banks Increasingly Use Payday Loans Despite Crackdown On Predatory Lending

Two years after the recession officially ended and one year after the creation of a landmark financial law meant to prevent another financial crisis, predatory lending practices remain a part of mainstream American banking, a new report from the Center for Responsible Lending shows.

On Thursday, the CRL, a nonprofit research organization, published a report saying that some mainstream banks are offering payday loans -- short-term, high-interest loans that can take customers months to pay off.

Payday loans have long been offered by non-banking establishments, such as shops that cash checks and money orders. But in recent years, well-known banks have started offering them too.

Here’s how a payday loan works: You, the customer, borrow money from the bank. The bank lends it to you at a high APR, or annual interest rate.

When your next paycheck comes, the bank repays itself out of your direct deposit -- taking the loan, plus whatever interest the bank charges. It doesn’t matter if you don’t have enough money in your account; the bank goes ahead and repays itself anyway, even if this triggers overdraft fees. Often customers end up having to take out another loan to get by until the next paycheck -- and so the cycle continues.

The CRL report isn't the first indication that mainstream banks have adopted this practice, which is sometimes called a “direct deposit advance” or a “checking account advance.”

In 2010, Bloomberg reported that banks including Wells Fargo, U.S. Bancorp and Fifth Third Bancorp were offering services called “checking advance products” -- which functioned very similarly to payday loans -- as a way to recoup billions in lost revenue after new overdraft-fee regulations were passed.

http://www.huffingtonpost.com/2011/0...comm_ref=false

[boutons_deux]

Should You Get Only $7000 if Wells Stole Your House?

If you are a too big to fail bank like Wells Fargo, the wages of crime look awfully good. RIp off as many as 10,000 people to the point where they lose their homes and your good friend the Fed will let you off the hook for somewhere between $1000 and $20,000 per house.

all the loss of your home is worth according to the Fed is your moving costs and maybe a month or two of rent.

http://www.nakedcapitalism.com/2011/...+capitalism%29

Fed to Wells: $7000 for Wrongful Foreclosure

http://www.creditslips.org/creditsli...redit+Slips%29

==========

All the right-wing assholes on this board were spewing the VRWC lie that the housing mess was the entire fault of F&F, CRA, Acorn, and lying borrowers.

[boutons_deux]

cc lenders are the same predatory mofos everywhere.

Rise of Consumer Credit in Chile and Brazil Leads to Big Debts and Lender Abuses

Ms. Silva was among 418,000 clients in Chile who fell behind on their payments and had their debts repackaged by the retailer La Polar, which raised interest rates and extended loan terms without their knowledge. In early June, it came to light that executives at La Polar had been unilaterally renegotiating clients’ debts for more than six years. The news stunned Chileans and has become one of the biggest financial scandals of Chile’s 20-year economic boom.

“I share blame in this, but this company should have been more honorable and transparent,” said Ms. Silva, 30. “They were targeting people with more modest means. This became a vicious cycle that was never going to end.”

The scandal has underscored how South American countries — including Chile and Brazil, two of the region’s healthiest economies — are going through growing pains as the use of credit grows. The credit-fueled spending has driven extensive economic growth. But it has also opened the door to abuses, as credit issuers have used predatory techniques to lure customers, particularly young and less affluent ones, in countries where regulation is scant, annual interest charges can top 220 percent and consumers cannot seek bankruptcy protection, economists and consumer defense groups say.

The cases reveal troubling undercurrents in the South American economic boom: indiscriminate lending, lax regulation and ballooning over-indebtedness of large parts of the population, especially those with lower incomes.

http://www.nytimes.com/2011/07/24/bu...gewanted=print

=============

It takes two to tango, but these cc corps know exactly and much better their criminal game than do their poor, naive individual prey.

[boutons_deux]

QE3 coming up, and this. If the Repugs want it, you know it's good for Wall St and bad for H-As

More Shades of TARP: Latest Deficit Ceiling Plan to Establish Extra-Cons utional Legislative Process

Debt ceiling negotiators think they’ve hit on a solution to address the debt ceiling impasse and the public’s unwillingness to let go of benefits such as Medicare and Social Security that have been earned over a lifetime of work: Create a new Congress.

This “Super Congress,” composed of members of both chambers and both parties, isn’t mentioned anywhere in the Cons ution, but would be granted extraordinary new powers. Under a plan put forth by Senate Minority Leader Mitch McConnell (R-Ky.) and his counterpart Majority Leader Harry Reid (D-Nev.), legislation to lift the debt ceiling would be accompanied by the creation of a 12-member panel made up of 12 lawmakers — six from each chamber and six from each party.

Legislation approved by the Super Congress — which some on Capitol Hill are calling the “super committee” — would then be fast-tracked through both chambers, where it couldn’t be amended by simple, regular lawmakers, who’d have the ability only to cast an up or down vote. With the weight of both leaderships behind it, a product originated by the Super Congress would have a strong chance of moving through the little Congress and quickly becoming law. A Super Congress would be less accountable than the system that exists today, and would find it easier to strip the public of popular benefits. Negotiators are currently considering cutting the mortgage deduction and tax credits for retirement savings, for instance, extremely popular policies that would be difficult to slice up using the traditional legislative process.

House Speaker John Boehner (R-Ohio) has made a Super Congress a central part of his last-minute proposal.

The Tea Partiers make a fetish of invoking the Cons ution when it suits them but will happily run roughshod over it when it conflicts with their pet wishes. Not that they are singularly guilty in this conspiracy against the public-at-large, but their faux holier-than-thou/populist pretense while aligning themselves with an elite power grab is particularly nausea-inducing.

I hate using the word “fascism” because overuse has weakened its bite, but trumped-up threat by trumped up threat, our government is moving relentlessly in that direction.

http://www.nakedcapitalism.com/2011/...+capitalism%29

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Wall Street Donated Heavily To Boehner As The GOP Blocked Funding For Dodd-Frank

House Republicans, including Speaker of the House John Boehner (R-OH), were calling for repeal of the Dodd-Frank financial reform law even before it had passed. Once they achieved a majority, House Republicans worked to undermine the law by cutting the budgets of financial market regulators and trying to slow down the implementation of several of the law’s provision.

And Wall Street evidently appreciates the effort, donating heavily to Boehner over the first half of this year. As Bloomberg News reported, “three of the five biggest sources of Boehner’s campaign cash this year are employees of three Wall Street investment houses, a shift from the 2010 election cycle when such contributors weren’t ranked among his top 10 donors”:

Employees at the New York hedge fund Paulson & Co. contributed $61,050 to Boehner’s campaign account, more than any other company. New York-based Moore Capital Management LLP employees gave $53,000, while those at Cantor Fitzgerald LP donated $45,000.

No one from any of those companies donated to Boehner for his 2010 re-election campaign, according to the Center for Responsive Politics, a Washington-based research group that tracks political money. [...]

Boehner received most of the donations from Paulson & Co., Moore Capital and Cantor Fitzgerald in June, the same month the House voted along party lines to cut the budget of the Commodity Futures Trading Commission, which is writing most of the new derivatives rules, and the House Appropriations Committee voted to limit funding for the new consumer protection bureau.

http://thinkprogress.org/economy/201...tions-boehner/

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JP Morgan Tells Investors Why Middle Class Americans Are Screwed

In a recent report in a JP Morgan memo to their investors from Michael Cembalest, the chief investment officer he says, “US labor compensation is now at a 50-year low relative to both company sales and US GDP.” Cembalest continues to explain why corporate profits are so strong while the rest of the working class are feeling the pinch, “reductions in wages and benefits explain the majority of the net improvement in margins.” 75% of the increase in profit margins directly correlate with the reduction in workers’ wages.

http://www.politicususa.com/en/jp-mo...iticus+USA+%29