FDIC Secretly Settling Bank Cases For Years With 'No Press Release' Clause: Report [View all]
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.