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Mon Mar 11, 2013, 08:40 PM

FDIC Secretly Settling Bank Cases For Years With 'No Press Release' Clause: Report

Source: Huffington Post

At the request of rule-breaking bankers, a top U.S. regulator has for years settled bank cases in secret, raising the bar on just how far regulators are willing to go to help the industry they regulate.

The Federal Deposit Insurance Corp., which insures bank deposits in the U.S. and shuts down failing banks, has since 2007 repeatedly settled charges of banker wrongdoing by agreeing to "no press release" clauses that keep the settlements a secret, the Los Angeles Times reports.

In one particularly glaring example, Deutsche Bank agreed to pay $54 million to quietly settle charges that its New York mortgage-banking subsidiary, MortgageIT, sold bad loans to another mortgage bank, Independent National Mortgage Corporation, a/k/a "IndyMac." IndyMac collapsed under the weight of bad mortgage loans in July 2008, a notable milestone in the financial crisis.

In exchange for the settlement, the FDIC agreed not to announce the deal unless it was asked about it, the LAT writes. That was just one of "scores" of such settlements the LAT discovered through a Freedom of Information Act request that turned up 1,600 pages of documents.

Read more: http://www.huffingtonpost.com/2013/03/11/fdic-settlements-no-press-release_n_2854846.html

12 replies, 2732 views

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Reply FDIC Secretly Settling Bank Cases For Years With 'No Press Release' Clause: Report (Original post)
Cali_Democrat Mar 2013 OP
Laurian Mar 2013 #1
fascisthunter Mar 2013 #2
Jack Rabbit Mar 2013 #3
MichiganVote Mar 2013 #4
silvershadow Mar 2013 #5
JackRiddler Mar 2013 #6
OnyxCollie Mar 2013 #7
blkmusclmachine Mar 2013 #8
Roland99 Mar 2013 #9
abelenkpe Mar 2013 #10
Left Coast2020 Mar 2013 #11
JackRiddler Mar 2013 #12

Response to Cali_Democrat (Original post)

Mon Mar 11, 2013, 08:43 PM

1. Elizabeth Warren sure had these folks pegged correctly. I

hope her efforts to expose the cozy relationships between financial institutions and their regulators brings all the cockroaches out into the light for proper judgement.

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Response to Cali_Democrat (Original post)

Mon Mar 11, 2013, 08:51 PM

2. it pays to be a scumbag in America

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Response to Cali_Democrat (Original post)

Mon Mar 11, 2013, 09:02 PM

3. Some regulators need to go to jail

Do not pass Go. Do not start your new job on Wall Street.

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Response to Cali_Democrat (Original post)

Mon Mar 11, 2013, 09:12 PM

4. Well, this surely sets up the next time the bastards want to wreck the US economy.

Now they know for sure, they can get away with economic murder.

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Response to Cali_Democrat (Original post)

Mon Mar 11, 2013, 09:17 PM

5. Apparently transparency=invisibility. nt

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Response to Cali_Democrat (Original post)

Mon Mar 11, 2013, 09:41 PM

6. Original article from LA Times:



http://www.latimes.com/business/la-fi-fdic-settlements-20130311,0,3871291.story

In major policy shift, scores of FDIC settlements go unannounced

Since the mortgage meltdown, the FDIC has opted to settle cases while helping banks avoid bad press, rather than trumpeting punitive actions as a deterrent to others.

By E. Scott Reckard, Los Angeles Times

4:05 AM PDT, March 11, 2013

Three years ago, the Federal Deposit Insurance Corp. collected $54 million from Deutsche Bank in a settlement over unsound loans that contributed to a spectacular California bank failure.

The deal might have made big headlines, given that the bad loans contributed to the largest payout in FDIC history, $13 billion. But the government cut a deal with the bank's lawyers to keep it quiet: a "no press release" clause that required the FDIC never to mention the deal "except in response to a specific inquiry."

The FDIC has handled scores of settlements the same way since the mortgage meltdown, a major policy shift from previous crises, when the FDIC trumpeted punitive actions against banks as a deterrent to others.

Since 2007, 471 U.S. banks have failed, nearly depleting the FDIC deposit-insurance fund with $92.5 billion in losses. Rather than sue, the agency has typically preferred to settle for a fraction of the losses while helping the banks avoid bad press.

Read more at link!



For fuck's sake!

Do they pretend the cash from the settlements landed magically in their accounts? Maybe they should launder it through other agencies, or better yet HSBC.

Un-fucking-believable! Non-disclose settlements with criminals!

Hey, market's up for jillionth day in a row. What could ever go wrong again?

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Response to Cali_Democrat (Original post)

Mon Mar 11, 2013, 10:21 PM

7. It's not as good as retroactive immunity,

but the government got their cut of the booty and that's all that matters.

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Response to Cali_Democrat (Original post)

Mon Mar 11, 2013, 10:27 PM

8. Savvy businessmen

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Response to Cali_Democrat (Original post)

Mon Mar 11, 2013, 10:49 PM

9. Didn't Sheila Bair head the FDIC then?

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Response to Cali_Democrat (Original post)

Mon Mar 11, 2013, 11:07 PM

10. So the governments been making money and

Wall street has been making money but the rest of us still have depressed wages and benefits and need to sacrifice more?

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Response to Cali_Democrat (Original post)

Tue Mar 12, 2013, 02:43 AM

11. I think Senator Warren should see this...

But I'm not a constituent of hers.

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Response to Cali_Democrat (Original post)

Tue Mar 12, 2013, 12:31 PM

12. incredible!

Semi-secret government, even in this.

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