Daily Archives: April 2, 2014




The Obama administration’s top intelligence official has confirmed that the National Security Agency intentionally spied on the communications of Americans under a law intended to apply only to foreigners.

Director of National Intelligence James Clapper confirmed the surveillance in a letter responding to questioning from Sen. Ron Wyden, an Oregon Democrat. The agency spied on the actual contents of communications without a warrant—not just “metadata” such as call times and phone numbers.

“This is unacceptable. It raises serious constitutional questions, and poses a real threat to the privacy rights of law-abiding Americans,” Wyden and Sen. Mark Udall, a Colorado Democrat, said in a statement.

“If a government agency thinks that a particular American is engaged in terrorism or espionage, the Fourth Amendment requires that the government secure a warrant or emergency authorization before monitoring his or her communications,” the senators said. “This fact should be beyond dispute.”

Section 702 of the Foreign Intelligence Surveillance Act gives the NSA broad power to listen in on phone calls and access emails. But the law covers only non-Americans located outside of the United States.

The agency sometimes collects Americans’ information as it scoops up vast amounts of data on foreigners. In his letter to Wyden, Clapper revealed that the NSA has searched through that database specifically looking for Americans’ communications.

“There have been queries, using US person identifiers, of communications lawfully acquired to obtain foreign intelligence targeting non-US persons reasonably believed to be located outside the United States,” Clapper wrote.

The statement confirms that the NSA has been taking advantage of a secret rule change first revealed by The Guardian in August, based on documents leaked by Edward Snowden.

It’s unclear how many Americans have been affected by the surveillance, though the program is presumably much smaller than the NSA’s bulk collection of millions of phone records. But unlike that bulk data collection, Section 702 allows the NSA to listen to calls and read emails.

In their statement, Wyden and Udall said the confirmation from Clapper shows that Congress must ensure it closes the “loophole” in Section 702 to require that the NSA has to show probable cause of wrongdoing before targeting individual Americans.


Perfect time to remember the words of FDR: “I welcome their hatred!” (video)

“We know now that Government by organized money is just as dangerous as Government by organized mob.”–FDR

You know that old saying that those who refuse to study history being doomed to repeat it.


BANKING SCANDAL: banks RIG foreclosure settlements, MILLIONS kicked out of HOMES [ROBO-SIGNING]

Published on Mar 26, 2014
It turns out the “robo-signing” of foreclosure affidavits is just the tip of the iceberg.

In what one judge called “robo-testimony,” falsely attested-to statements by bank document custodians have been submitted in courts around the country by banks trying to win judgments against delinquent credit card debtors.

Apparently, tens of millions of credit cards issued by banks have not been accompanied by good recordkeeping, either.

Chasing down delinquent borrowers in court requires original credit agreements and accurate payment histories to verify outstanding balances and claims.

As it turns out, banks aren’t providing them – either to the courts or to third-party debt collection companies that buy uncollected debts for pennies on the dollar.

As a result of these shoddy practices, judgments already granted to banks could be overturned and they could be sued by state attorney generals or pursued by the Consumer Financial Protection Bureau.

The same banks could even be potentially charged by the Justice Department under the Racketeer Influenced and Corrupt Organizations (RICO) Statutes for selling dubiously documented accounts to debt collection companies.

While some debtors will take comfort in what they read here, investors in banks may want to question how legal issues and regulatory investigations will impact their stocks.

Questionable bank documentation submitted to courts may be the reason JPMorgan Chase & Co. (NYSE: JPM) abruptly abandoned over 1,000 debt collection lawsuits in April 2011.

However, debtors whose pending cases were dismissed aren’t out of the woods yet. All of Chases’ suits were dismissed “without prejudice,” meaning Chase can re-file the cases in the future.
A Debt Collector’s Dirty Trick
The only relief long-delinquent borrowers have is the statute of limitations imposed by most states on debt collection.

Statutes of limitation, which are typically between two and 15 years, are by themselves no guarantee that debt collection agencies, which buy accounts from banks, won’t try to still collect.

Some debt collection companies entice delinquent borrowers who are beyond their statute of limitation requirements to make payments by offering to reduce the whole amount owed.

Their aim is to get the borrower to make even a single payment. It’s an old trick.

By paying anything on a debt that is past the statute of limitations, the debt is brought back to life again and the statute of limitations clock starts all over from the date of the new payment.

It’s why debtors are browbeaten and enticed to make payments through mailings, harassing calls, and “transfer of balance” offers for new credit cards, which requires old debts to be rolled into the new credit agreement.

The industry term for restarting the clock on old debts is called “re-aging.”

The Federal Trade Commission’s Bureau of Consumer Protection calls it illegal and abusive.

Last month the FTC and the Justice Department settled with one of the country’s biggest debt collection companies in a case with repercussions for the entire debt collection industry.

Asset Acceptance Capital Corp., which the FTC had charged with violations of federal law – including that it “failed to tell debtors they couldn’t be sued” when they tricked them into making payments to “re-age” old debts – was fined $2.5 million without admitting or denying wrongdoing.

The FTC, upon fining Asset Acceptance, announced additional enforcement actions are pending.

They are now joined by the Consumer Financial Protection Bureau, which has the authority to go after banks for abusive collection tactics.


Some Americans Paid Off Credit Cards While Waiting for Foreclosure

Some Americans Paid Off Credit Cards While Waiting for Foreclosure

The sheer number of foreclosures during the recession may have helped some Americans pay off other debts, such as credit-card bills.

Foreclosures rose sharply during the recession, peaking around 2009, and the timeline for processing them stretched out in some states to as long as three years. That allowed people to remain in their homes longer without making mortgage payments, freeing up money for other expenses, according to research from theFederal Reserve Bank of Philadelphia.


Bay Area Toll Authority v. Bank Of America; Barclays Bank; Bank of Tokyo-Mitsubishi;

Bay Area Toll Authority v. Bank Of America; Barclays Bank; Bank of Tokyo-Mitsubishi;

At least a dozen banks and their subsidiaries reaped “unjustified revenues” by suppressing the London interbank offered rate, a holder of Libor-linked interest-rate swaps claims.


Ex-JPMorgan Trader Willing To Face ‘Whale’ Charges, Atty Says

Ex-JPMorgan Trader Willing To Face ‘Whale’ Charges, Atty Says

Law360, New York (April 02, 2014, 2:25 PM ET) — Julien Grout, one of two former JPMorgan Chase & Co. employees indicted over the bank’s $6 billion “London Whale” trading loss, is willing to leave his native France to face the charges in U.S. court under certain bail conditions, his attorney said Wednesday.


Suit Against JPMorgan Allowed Under SLUSA, 7th Circ. Told

Suit Against JPMorgan Allowed Under SLUSA, 7th Circ. Told

Law360, Chicago (April 02, 2014, 2:28 PM ET) — A group of former JPMorgan Chase Bank NA clients urged the Seventh Circuit on Wednesday to revive their proposed class action accusing the bank of ignoring their interests by steering them into its own mutual funds, denying that the suit is precluded under the Securities Litigation Uniform Standards Act.


JPMorgan global commodities unit head Masters to leave: memo

JPMorgan global commodities unit head Masters to leave: memo

Blythe Masters, one of Wall Street’s most powerful women, is leaving JPMorgan Chase & Co. (>> JPMorgan Chase & Co.) after a 27-year career that began as an intern in London and concludes with the sale of the multibillion-dollar commodities business she built.

Blythe Masters, one of Wall Street’s most powerful women, is leaving JPMorgan Chase & Co. (>> JPMorgan Chase & Co.) after a 27-year career that began as an intern in London and concludes with the sale of the multibillion-dollar commodities business she built.

Masters, who turned 45 in late March, will leave the bank in a few months after assisting with the sale of its physical energy and metals business to Swiss merchant Mercuria. Many observers had not expected her to remain with the business after its sale, although her future with JPMorgan was less clear.

She will take “time off” and “consider future opportunities,” according to a memo bank executives sent to employees on Wednesday.


10 Special Interest Tax Breaks That Cost You Plenty: Part 9

10 Special Interest Tax Breaks That Cost You Plenty: Part 9

When companies “pay” huge amounts of money to settle claims that they broke the law, don’t believe the hype: the bill may be a lot less than advertised.

That’s because we taxpayers may be picking up part of the tab.

How? The tax code allows companies to deduct some or all of the payments as ordinary business expenses, so long as the payments are restitution, compensation or ‘remedial’ penalties.


Speaking of Wall Street wrongdoing, JPMorgan Chase (NYSE: JPM) will deduct what it can from its $13 billion fraud settlement with the government. Reuters reported that as much as $11 billion could be deductible, making the true cost to JPMorgan Chase $9 billion, after tax. That would mean taxpayers are eating about 30 percent of the headline number.

Making the Subsidies Stop, or at least, Transparent

For years Congress has toyed with changing the rules to end these subsidies or make them more visible. Two efforts are currently underway. One, the aptly named “Truth In Settlements Act of 2014”, focuses on transparency and has bipartisan sponsors in both houses, Senators Warren (D-MA) and Grassley (R-IA) and Representatives Tom Cole (R-OK) and Matt Cartwright (D-PA).

Unfortunately, Wood is not sanguine the change will come: “I think the transparency bills are a good idea. I think it’s efficient for the public and the tax system. I also don’t think it’s likely to happen. Getting any tax bill passed is tough.”

Given Congress’s dysfunction and its focus on getting re-elected in November, he’s probably right. As of now, the Senate bill has only the two co-sponsors, and the House version only five.

An important question is: why all the focus on penalties and whether or not they’re punitive or remedial? Every single dime of JPMorgan Chase’s “13” billion dollar settlement is being paid because of its wrongdoing.



Sound and fury at CFPB racial discrimination hearing

Sound and fury at CFPB racial discrimination hearing

There was a certain level of disingenuousness that went beyond the usual political posturing at the House Oversight & Investigation Subcommittee investigating discrimination and retaliation at the Consumer Financial Protection Bureau Wednesday morning.

It was a morning of allegations and jockeying for position, with one victim telling the tale, one investigator making her report, and not one of the CFPB’s senior executives present.

On the table were 115 employee grievances, 85 informal complaints, and the testimony of two women who experienced the CFPB management response to the allegations first hand.

In a hearing with partisan heat just simmering, Democrats opened by demanding a standard of proof of the allegations that they’d never demand in any other similar investigation.

Meanwhile, Republicans – who want to keep pressure on the CFPB on as many fronts as possible – seemed to be embracing the vague, controversial legal theory of disparate impact, which says even if there is no discrimination, if the outcome isn’t racially balanced, then there is discrimination anyway.

Having U.S. Rep. Al Green, D-Texas, saying that he wants to make headway and not headlines in anything related to racial discrimination was, in fact, one of the ironies in a morning of ironies.