According to Reuters, the attorney generals from all 50 states are teaming up to create a settlement package with banks that practiced predatory lending. The package would include “up to $25 billion in penalties and commitments to follow new rules. In exchange, the banks would get immunity from civil lawsuits by the states, as well as similar guarantees by the Justice Department and Department of Housing and Urban Development, which have participated in the talks.”
How could this happen? $25 billion in restitution and empty promises to follow new rules? That is considered fair nowadays in return for having caused a global economic crisis, the worst U.S. economic downturn since the Great Depression, and the loss of millions of jobs and pensions? Wall Street says the recession is over, but the average American citizen would call shenanigans on that statement. Unemployment claims have risen in the past several months and job growth has been stagnant. But of course, that’s not the fault of the banks anymore, right? Of course they would never do anything like this again, they say!
Why are the banks treated like foreign diplomats, given full reprieve from their current and future crimes? I will tell you why: the banks are in bed with the government, and we have allowed them to become the backbone of our economy. The heads of these banks know that their organizations are essential to the recession – consumers and businesses need loans from them, and the federal government needs a way to control currency. Thus, they have the United States economy as their bargaining chip.
The only way to really limit the power of the banks is to make it so that they cannot repeat the actions that led to this terrible recession. The recession was, in large part, caused actions that became legal after the repeal of the Glass-Steagall act put into place after the Great Depression. Banks were able to lobby to repeal it, and as such they were able to engage in reckless financial gambling with consumers’ deposited funds. Banks have to be made to be banks again; we cannot afford to keep our money in gambling houses any longer.
Thus, it is inexcusable that banks continue to engage in frivolous lending and borrowing practices. They must be prosecuted to the full extent of the law, and those government officials that allowed such gross financial crime to occur must be brought to justice as accessories of the crimes. The hands of Corporate America must be kept out of federal coffers and justice offices, and democracy must be brought back to the pen of the American voter.