FDIC Objects to $8.5 Billion BofA Settlement (Updated)

Ooh, this is getting to be fun. Now the FDIC has weighed in too.

Can’t wait to get my hands on the filing (any readers who can get it are encouraged to provide a link or send a pdf so I can upload it).

Needless to say, the FDIC objection is further validation of the questions raised by attorneys general Eric Schneiderman and Beau Biden.

No details yet, merely a notice of the existence of the objection at Bloomberg.

Update. Here is the filing. The general logic is similar to the Biden objection (although he also took a major shot at the Bank of New York role), but this is as skeletal as it gets. This is literally a placeholder, to weigh in prior to the deadline for objections, which is August 30.

FDIC Objection to Bank of America Mortgage Settlement

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  1. appointmetotheboard

    Well, I hope that’s the first sign that common sense will prevail. Criminality should be prosecuted wherever it is found, and there should be no exceptions or exemptions for Wall Street.

    1. Paul in TO

      Even if what you say and what you assume are correct are there any second thoughts at the example set by South Africa and the US after the Civil War? This may not have started in bloodshed, but it is a very, very big problem. Admittedly, it takes a relatively great person to look beyond the desire for revenge, but the greater good may demand it.

      Moreover, some of the issues here are very complex and for every person who points at a banker, there is another who points at big government telling banks to increase lending to unqualified borrowers (not to mention borrowing themselves for everything under the sun). Is Dick Fuld more guilty than Barney Frank? It depends where you sit.

      You can prosecute everyone you think is guilty — and that may be justified by what some have done — but in doing that you run the risk that the greater good may ultimately suffer.

      The bottom line is that what this generation has taken for granted — that debt is a legitimate method to increase wealth — is the greatest tragedy of the age. It exists at every level of society and it now threatens to destroy us.

      Too much debt is THE problem. How we got here is now irrelevant. How we get out of it will require the good faith of everyone.

      1. Dr Duh

        Please spare me the pious talk about reconciliation… it is time for Reconstruction. If we want to ‘look forward instead of backward’ then I’ll settle for ‘split the difference’ haircuts for mortgage holders, a break up of the supra-regional and national banks, a reimposition of glass steagle, renewed fairness in the tax code (under which I personally will pay more) but carried interest and capital gains will be treated as income, campaign finance reform, massive investment in human capital and repair of the social safety net.

        In return I’ll forgo the pleasure of mass RICO prosecutions.

        1. Fed up

          “renewed fairness in the tax code”.

          I never know what that even means, although I taught my kids to stop whining about “fairness” after the age of 10.

          What’s “fair” about taking money from savers and giving it to those who borrowed to live the good life. Maybe I’m willing to bail out the irresponsible, but in return I want less government and more responsible government when this is over.

          I don’t realy care about whether or not people are prosecuted, but the whole “banksters” thing is more about class warfare than actual criminal investigations. Most bankers haven’t a clue what they’re doing or what went wrong — just like the idiots who tried to live up to some media idea of success by buying a big house they couldn’t afford.

          Let’s prosecute everyone for being stupid! Then those of us who don’t have a penny of debt — and remained content with an apartment they could actually afford — will bail them out, which is exactly what mortgage forgiveness and fairness in the tax code actualy mean.

          Moral hazzard isn’t confined to those working in banks.

          1. Nathanael

            Well, you’ve drunk the Kool-Aid.

            What’s “fair” is to prosecute the banksters who are called that because they have engaged in *blatantly criminal fraud*. Try reading Naked Capitalism before commenting.

      2. Nathanael

        We all know the period after the Civil War would have gone better if criminals like Nathan Bedford Forrest had been executed. Spare me the false piety.

        1. PaulinTO

          So you’ve decided that whatever was said is “false”? Undoubtedly a very reasonable man indeed. I have renewed hope that everything will work out well in the land of the free.

          I do know that there are times when it’s better to move on than to seek vengence, and usually that occurs when rebuilding is absolutely essential. I also know that there are times when even in such cases there are people who would rather everyone suffer than to give up on their thirst for revenge.

          I think politicians, bankers and idiot borrowers are equally to blame for all of this. Which ones do we execute first? And who decides? I’m pretty sure I know your answer to the latter.

          Drinking Kool-aid is usually reserved for the sheep who get themselves worked up for every populist call to unleash violence on whomever it is that they hate. IT NEVER WORKS OUT the way you hope.

          In Rome they started prosecuting politicians when they left office. Surprise, surprise, they became reluctant to leave office. When Caesar was faced with the prospect of facing his accusers or marching on Rome, he chose the latter.

          I’m sure from the confines of your room, storming the glass towers makes you feel powerful, but every such attempt ends unpredictably.

    1. Susan the other

      …and it gets even funnier when you realize the FDIC cannot insure any deposits already because there is a potential 6Tr deficit in its fund… We need a new system BEFORE this one implodes.

  2. Sam

    Please outline clearly and in detail what you think a Republican President would be doing right now. Remember, from 2000-2006 all three branches of the government had Republican majorities.

    Right now, the House of Representatives is Republican. Michele Bachman and Ron Paul are elected. What should they be doing now? I’m all for reinstating Glass-Steagall, ending the private bank cartel known as the Federal Reserve, and stopping fractional reserve lending. I’m all for outlawing lobbying, and I think someone posted online the lobbying money Ron Paul is accepting. Michele Bachman probably has gold plated lobbyist money, given she’s certainly at the government trough.

    1. Julian

      So because a theoretical Republican might be worse, the current Democratic president should not be reproached for unethical, or merely foolish, policy decisions? How does what a Republican would or would not do in the same position have anything at all to do with the rightness of Obama’s actions?

  3. Celebrindan

    Follow the money.

    Who is the clarion voice, the national trumpet, championing the Tea Party cause?

    What outlet defends their right, to the Right?

    Who’s right hand man just stepped down from DJ?

    Who is currently under investigation for crimes against the business, law enforcement, elected officials, and the public in Great Britain?

    Do not take your eyes off the ball.

  4. 5:00 PM

    Calling Michelle Bachman stupid is an insult to stupid people. She’s got no chance; the real danger is Perry, who is a complete corporate tool disguised as a “Texas Maverick.” Sound familiar?

    Obama is the most disappointing president in my lifetime, but virtually any of the announced GOP candidates would likely be far worse.

    So I guess what I’m saying is: we’re screwed.

      1. Francois T

        You’re wondering?

        Just peruse the archives here at NC. As you know, Yves cannot possibly be confounded with a militant of the Red Brigades of the Symbionese Liberation Army. yet, read the progression of her writings on the Obama Administration.

        That is for the economic record.

        As for the atrocious record of Obama on civil rights, Glenn Greenwald is the site to visit. Glenn is very articulated, he document his arguments thoroughly, and he cannot be accused of being pro-GOP; just read his archives on GW, Rumsfeld and Cheney.

          1. sunlight

            Oh Alice, Alice, Alice. As Adolph Zukor, legendary founder of Paramount Pictures said,”The fish stinks from the head.”

            Almost like our Obamabots of today, millions of loyal Russian Communists, thought, “if only Stalin knew,” regarding the terrible conditions at the gulags and of course, the equally awful purges. It turned out that for years Stalin had lots of fun cooking up the next purge, the wave of arrests, the next Terror, with lieutenants like Beria and Yagoda.

            Hitler did not sign orders starting the Holocaust, but he attended the notorious Wansee Conference in 1942 where it was decided that Jews, Gypsies, gays, and others would be “sent to work in the East,” but not expected to return.

            History shows that the person at the top almost always gives the orders. And in the rarer case that he didn’t give the orders (and the decides he wants to know), he finds out, as in the case of Warren Harding and Teapot Dome.

            And Nixon knew all about the Watergate cover-up even we don’t know how high up approvals went for the actual burglary.

            While I am certainly not comparing the scale of Obama’s misdeeds with those of Hitler and Stalin (I’ll leave that to the Glenn Becks of the world) I can’t believe there is any way on God’s green earth that Obama doesn’t know about how his awful records on civil rights and bank bailouts came to be.

            Dollars to donuts, we will find that Rupert Murdoch ordered phone hacking. Anyone want the other side of THAT bet?

    1. banger

      Huntsman is an interesting candidate–he likes Foo Fighters and Muse. I can’t imagine any of the other candidates going that far, that counts for something in my book.

  5. Federal Enablers

    Wouldn’t it have been more appropriate to put BOA in receivership, say late 2010? Seize Chase!

  6. FDIC=Incompetent

    The FDIC is among the more incompetent and useless agencies that I have observed over the years.

    1. YankeeFrank

      Nope. The FDIC are the only ones who actually do their job anymore. Not sure what you think they’re supposed to do, but they’ve been hamstrung from doing their job as regards the to big to exist banks, so they are doing it with the smaller banks. And, the FDIC heads tend to be the only even somewhat responsible leaders of any government financial body in the US, bar none.

  7. killben

    Why don’t Americans have the sense to elect Ron Paul?

    If they want someone who can get them out of the mess it has to be Ron Paul. For a start I am sure he would rein in the “Economic Hitler” Ben Bernanke.

    1. Yearning To Learn

      I’ll field that…
      on a side note, I vote for Denis Kucinich almost every election, and I donated to Ron Paul’s last endeavor, although I personally would have a hard time voting for him.

      a few reasons
      1) most don’t know much about him. he’s got a media blackout
      2) his age. electing him brings up the question of electing his running mate. to be electable he’d have to name an awesome VP, and he can’t do that until he wins the nomination. catch 22.
      3) although his ECONOMIC views resonate with much of the country, his SOCIAL views do not. I’ve heard all the apologists for his campaign, but the facts remain. He’s socially out of touch with many.

      I know many of you straight white males say “what’s the big deal, we’re just electing him on his economic agenda”. but many of us who do not fit in that category get nervous about voting for someone who is openly against the civil rights act as example. Ron Paul is a hopeless idealist (or a simply lying) when he talks about the “free market” or “freedom” stopping the racial atrocities that happened in America circa mid 1900’s.

      I’m sorry, but it would be very very hard for me to bring my kids around and see “no coloreds” signs again. Yes… I could simply use my money elsewhere… and yes, I guess it is a limitation of the shop owner’s god-given right to only serve whites… but it makes me uncomfortable.
      what do you think would happen if RP pushed through an overturn of the civil rights act?

      My bro in law (classic RP guy. white, rich, buying lots of gold, etc) was all a-gaga about him a few years ago (and still is), so I did my own research. RP seems an affable smart guy and he IS true to his character, a refreshing break… but then I read his newsletter. true, he did not write everything in that newsletter… but the words in that newsletter are ABHORRENT… they’re not just kinda bad they’re disgusting. And he has his name all over it. Putting your name on a disgusting newsletter leads to personal culpability.

      Take whatever you find dear in life that is not economic. Then imaging a candidate saying awful things about it. And then try voting for him. Hard to do. I’d give up $100,000/year to never have to have my kids see a “whites only” sign on a bathroom.

      although I wish him well, and I’ll probably contribute to his campaign again, I will never be able to vote for him. Ever.

      Money does NOT equal Freedom, no matter what the right seems to think.

      all that said: I donate to him because I like that he brings up
      -decreasing/ending Fed
      -stopping foreign wars

      to name a few.

      1. za

        A lot of skeletons in RP’s closet.

        I have since come to think that libertarianism is an algorithm for a failed Turing machine, not a valid belief system.

    2. nikhil

      Because most of his ideas economic and social are bonkers. I can get behind his end the war, importance of civil liberties, liberalizing drug law stuff. That’s all good.

      But gold standard? Disagreement with Civil Rights Act? Just these two ideas are crazy and dangerous enough without getting into his whole “free market” ideology. I think he would be a disaster.

    3. F. Beard

      I sent RP money and wrote him in for 2008. But now I’m not so sure. He is supposedly for alternative private currencies but only if they are precious metals! What about private money forms that do not require usury? Also, he has indicated support for a US gold standard. But government money should only be cheap fiat for ethical and libertarian reasons. What the heck does liberty have to do with gold? ans: Absolutely nothing.

      I am also sympathetic to Yearning To Learn’s concerns. A bigot’s right to discriminate should be very low on anyone’s priority list.

  8. Jim in SC

    Yearning: I don’t see how you can contribute to Ron Paul, but not vote for him. He’s never really been on my radar screen, as isolationisism hasn’t been a viable policy for the US since WW2, though maybe President Perry will bring it back. Ron and Rand bring to mind the kind of thinking that brought us the John Birch Society. As the fellow who lived across the hall from me in college used to say, ‘none dare call it crankiness’!

    1. chris

      Isolationism is a better policy than murdering Libyan women and children through the auspices and depravity of the Nobel Peace Prize winning corporatist stooge currently in the White House.

    2. Externality

      Dr. Paul is NOT an isolationist.

      He believes that Americans should trade with other countries; travel to and from them; communicate freely with them; offer them time-limited assistance following disasters such as earthquakes; and encourage their citizens to travel and immigrate to the US, according to US and foreign laws.

      Dr. Paul has no plans to turn the US into a North Korea-style hermit kingdom.

      Somehow, the term “isolationist” has come to refer to people who do not want to fight wars of choice all over the planet and/or who want to close some of our 800+ military bases in foreign countries. The US cannot afford the mentality, common among neocons, Israel-firsters, and liberal interventionists, that America should go from country to country fighting petty dictators, foreign “terrorist” groups that have no intent and/or ability to attack the US, countries that want to sell oil in something other than dollars, countries that Israel cannot get along with or has paranoid delusions about, etc.

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