Daily Archives: July 23, 2015

U.S. Authorities Probe Banks’ Handling of FIFA Funds

U.S. authorities have intensified their scrutiny into a handful of major financial institutions’ handling of potentially tainted funds connected to widespread allegations of corruption within soccer’s governing body, FIFA, according to people familiar with the matter.

Prosecutors in the Brooklyn U.S. attorney’s office and New York’s top banking regulator have separately contacted more than a half dozen banks combined in connection with the soccer scandal in recent weeks. Authorities are focused on whether the banks’ required anti-money-laundering systems should have caught the allegedly corrupt payments, the people said. They have also told the banks to scour their books for any illegal payments related to FIFA, they said.

Prosecutors have questioned HSBC Holdings PLC, Standard Chartered PLC and Delta National Bank and Trust Company, according to the people. At least three other major international banks have been contacted in the probe, the people said. Those banks could not be identified and it’s not clear if the separate probes by the U.S. attorney’s office and the New York regulator are looking at identical groups of banks.

Read on.

Government opposes Bank of America appeal in ‘Hustle’ case

Bank is appealing judge’s order imposing $1.27 billion in penalties

Case centers on Countrywide’s now-defunct “Hustle” program

Jury in 2013 found Countrywide liable for knowingly selling bad home loans

A federal appeals court should not overturn a judge’s ruling that Bank of America pay $1.27 billion in penalties for defective mortgages sold in Countrywide Financial Corp.’s now-defunct “Hustle” program, the U.S. government says.

On Wednesday, the government filed its opposition to Bank of America’s appeal of the penalties the federal judge imposed on it last year in the three-year-old case. The Charlotte bank was ordered to pay the penalties after a jury in 2013 found Countrywide Financial liable for knowingly selling bad home loans to mortgage giants Fannie Mae and Freddie Mac.

In February, the judge who ruled the bank should pay the penalties, Jed Rakoff in Manhattan, denied the lender’s request to overturn the jury’s verdict. Bank of America, which has said the Hustle program ended before it bought Countrywide in 2008, appealed that decision in April.

Fannie and Freddie are Back, Bigger and Badder Than Ever

We learn from the New York Times that:

AFTER the financial crisis of 2008, there was one thing that almost everyone agreed on. The government-sponsored mortgage giants, Fannie Mae and Freddie Mac, had to go. While shareholders and executives reaped the profits from Fannie and Freddie in good times, taxpayers were stuck with the bill in a crisis. President Obama described their dysfunctional business model as “Heads we win, tails you lose.” But here we are, seven years after the crisis, and nothing has changed.

In the 2008 crisis, when it looked as if Fannie and Freddie might go bankrupt, Henry M. Paulson Jr., then the Treasury secretary, argued that their fall would cause economic catastrophe. Foreign investors, stuck with their securities, would panic, and the mortgage market would shut down. So Fannie and Freddie were put into something called conservatorship, and are now government controlled, supported by a line of credit from the Treasury.

Conservatorship was supposed to be temporary — a “time out,” according to Mr. Paulson. We were going to stabilize the companies’ finances, reduce their importance to the mortgage market, and figure out a better system. But nothing happened. In fact, the situation has gotten even more precarious. In the years since the crisis, private lenders, for the most part, have been willing to make mortgages if they can immediately sell them to government agencies, mainly Fannie and Freddie. In other words, without Fannie and Freddie, there wouldn’t be much of a mortgage market.

To make things worse, the government decided to “sweep” almost all the duo’s profits into its own coffers, to be used as a slush fund for general government expenses. As Treasury Secretary Jacob J. Lew said in congressional testimony this spring, “As a practical matter it’s what has helped us reduce our overall deficit.” If there is another downturn in the real estate market and Fannie and Freddie suffer losses on their some $5 trillion in outstanding securities, taxpayers will again have to foot the bill. 

Shame on Eric Holder, Wall Street’s Attorney General

By Clara Herzberg, Truthout | Op-Ed

Well, well, well. Eric Holder is returning to his cushy job at Covington & Burling where he reportedly pulled in $2.5 million the last year he was there. Holder didn’t think it was strange he was returning to one of Wall Street’s most highly regarded defense firms after all the bankers he let breezily carry on with fraud, bribery, money laundering, tax evasion and plenty of other very prosecutable offenses during his tenure as US attorney general.

Holder explained simply: “The firm’s emphasis on pro bono work and being engaged in the civic life of this country is consistent with my worldview that lawyers need to be socially active.” Yeah, and what about the $2.5 million, Mr. Holder? That’s got nothing to do with it surely.

Holder had just spent six years in Washington handing out slaps on the wrist to financial institutions that claimed they were “too big to fail” while secretly receiving government assistance. His help almost certainly amounted to billions of dollars of aid to Wall Street. Now he’s trotting back on his high horse to go collect millions for his top position in the firm.

Read on.

Crapo, Warner urge Congress not to use Fannie, Freddie fees for federal spending

Reaffirming their position that the fees charged by Fannie Mae and Freddie Mac should not be used to fund federal spending, Sen. Mike Crapo, R-Idaho, and Sen. Mark Warner, D-Va., sent a letter to the Senate leadership, asking them to reconsider the use of g-fees to offset the cost of a massive transportation bill.

The bill, called The Developing a Reliable and Innovative Vision for the Economy Act or the DRIVE Act, is a six-year highway authorization that will allow planning for important long-term projects around the country, and provides three years of guaranteed funding for the highway trust fund.

But one of the ways the $47 billion bill is paid for is a significant delay to scheduled cuts in g-fees. The bill would delay a scheduled 10 basis point cut in g-fees from 2021 to 2025.

Earlier this year, Crapo and Warner introduced budget point of order that would prevent g-fees from being used to offset federal spending, a practice the Senators call a “budgetary gimmick” and a “back door tax” on homeowners.

Read on.

Bamboozling by Banks and Regulators Reaches An All Time High!

It seems our banking regulators and agencies are becoming even more creative in order to get around having to impose the normal penalties against large banks for fraudulent behavior.

A recent case in point is HUD’s proposing  to modify their individual loan certification form which is currently required by banks to obtain FHA insurance. With this modification, Chase and Citigroup wouldn’t have to acknowledge the recent fraud associated with foreign exchange manipulation, which makes them ineligible for FHA insurance.

Members of Congress Sherrod Brown (D-OH), Elizabeth Warren (D-MA), and Maxine Waters (D-CA) have noted in a letter to HUD and FHA heads that “Under the current loan certification requirements … big banks, including two major FHA lenders, JP Morgan Chase and Citigroup – would be barred from obtaining FHA insurance once their criminal plea agreements take effect.” The  lawmakers also noted that with the proposed change “those banks remain eligible for FHA insurance.”

This so-called “modification” lets the banks off scot-free! They can continue to play the FHA insurance game. They committed the fraud, and if the modification goes through, there are no repercussions.

 Read More


Judge orders massive release of Fannie, Freddie conservatorship docs update, here are the court document

Case 1:13-cv-00465-MMS Document 205 Filed 07/14/15 Page 1 of 82

Here is the court document order from Judge Sweeney for those that are interested. Click here to view the judge’s order granting general leave. And here is the  court document of plantiff’s motion to unseal Treasury and FHFA documents. Click here.

And more:

2015-07-14 Plaintiffs Redacted Motion to Unseal PwC Documents

2015-07-14 Plaintiffs Redacted Motion to Unseal Fannie Mae Documents

2015-07-14 Plaintiffs Redacted Motion to Unseal Deloitte Documents

2015-07-14 Plaintiffs redacted motion to unseal Graham Thornton documents documents

7:15:15 Motion to unseal Freddie Mac documents pdf


On 7/14/15 in a motion put forth by the government arguing for more time to respond to the motion to unseal documents and depositions, this was confirmed:

Elizabeth Warren warns that evil never sleeps: GOP is trying to whittle down the CFPB

Elizabeth Warren pic

From Elizabeth Warren blog:

The new consumer agency was about leveling the playing field, about making sure that families didn’t get cheated in the fine print on mortgages and credit cards and checking accounts and all other kinds of financial dealings.

The financial industry had fought us every inch of the way, spending more than a million dollars a day for over a year. Many times, they declared the agency dead. We didn’t have that kind of money to spend on lobbyists and PR firms – heck, we had hardly any money in comparison – but we didn’t give up. We built an organization from the ground up, and we pulled in allies and grassroots activists from all over the country. It was David-versus-Goliath all the way, and in the fight for the consumer agency, David pulled it off.

And the fight was worth it. The agency went operational four years ago today, and it has handled650,000 complaints since it opened its doors – some with money back and some with an apology. Mortgages have gotten clearer and easier to read. Work on credit cards, student loans, checking accounts, small-dollar loans, and other products is headed in the right direction. And in that four years, the consumer agency has forced the biggest banks in this country to return more than $10 billion directly to people they cheated.

The CFPB has helped level the playing field, and it has given consumers a tough watchdog who is on their side.

Right now, the Republicans are trying to hamstring the CFPB by slashing its funding, reducing its jurisdiction, and restricting its enforcement authority – steps that would undermine the market by taking financial cops off the beat. Republican presidential candidates have said they would repeal it outright. With no cops, big banks could make more money not by offering better products, but by cheating their customers.

Skyrocketing CEO Pay Is Bad for Our Economy

This week marks the 5th anniversary of the Dodd-Frank Wall Street Reform and Protection Act. While the law has made some solid strides toward regulating Wall Street (with the creation of the Consumer Financial Protection Bureau arguably the most potent and popular), there is still much work to be done, particularly in the realm of CEO pay reform.

From 1978 to 2014, executive compensation at American firms rose 997 percent, compared with a sluggish 10.9 percent growth in worker compensation over the same period.

While CEO pay continues its determined ascent up a seemingly limitless mountain of stock options and other performance pay, the SEC has yet to implement all of the Dodd-Frank rules designed to reform CEO pay practices. The Say-on-Pay provision, which allows shareholders an advisory vote on proposed executive compensation packages, has been in effect since 2011, and Section 954—the clawbacks provision—should soon be finalized. But the SEC continues to delay the disclosure rule on CEO–worker pay gaps, as well as a few other key provisions.

This raises a few obvious questions: Why is it so important to urge the SEC to implement these CEO pay reform rules? Does it really matter how much CEOs are paid? Isn’t this debate really just about people being jealous of, for example, former Oracle chief Larry Ellison and his Hawaiian island?

Hardly. We have to stop talking about the CEO pay issue in terms of fairness, which usually leads to accusations of envy. This conversation just doesn’t get us very far. The truth is that skyrocketing CEO pay is terrible for our economy for two reasons, as we explain in the infographic below.


Read on.

Author exposes Wells Fargo in a book, available on August 17, 2015

Very interesting…

Ron Irwin completes book “Hell’s Bank” EXPOSING Wells Fargo CEO John Stumpf for $38 BILLION in fines and penalties a pattern of discriminatory practices and overt racism.  Book release date August 17th2015.


BURBANK, CA  In his ninth book author Ron Irwin has investigated and now reports on a pattern of gross misconduct that has led to Wells Fargo & Company to paying over $38 BILLION in civil fines and penalties for a variety of severe violations of applicable rules and laws including one landmark case involving blatant racial discrimination against more than 30,000 African American and Hispanic customers.

“I find it abhorrent that such utterly disgraceful conduct of this magnitude can happen while one man, John G. Stumpf, CEO of Wells Fargo & Company receives compensation in excess of $160 MILLION.  How can it be that Stumpf receives such lush pay as his company literally destroys the lives on tens of thousands of its customers’ for no better reason that out of control greed and raging racism,”  said author Irwin.

The book will be released to the global market on Amazon.com and BarnesandNoble.com and many other literary websites around the globe on August 17th 2015.

Read more:The Gilmer Mirror – Author EXPOSES Wells Fargo