It’s all about the benjamins…
So that happened. This week, the House of Representatives voted to help banks and car dealerships discriminate against customers of color. And it wasn’t just Republicans — 88 Democrats, including Democratic National Committee Chair Debbie Wasserman Schultz (D-Fla.) — voted in favor of the legislation.
Most dealerships are authorized to sell cars and make loans to finance the purchase. They send their customers’ financial information to a bank, which then sends the dealer an appropriate interest rate for a borrower with that particular credit profile. But banks also permit dealers to “mark up” the interest rate on the loan to a higher level, and allow the dealership to pocket some of the additional charge.
That, of course, creates incentives for the dealer to charge people higher interest rates. But lawsuits dating back to the 1990s have shown that people of color are more likely to have their interest rates marked up than white borrowers. Black, Latino and Asian-American borrowers also tend to see higher markups than white borrowers.
A Manhattan federal court judge on Friday took prosecutors to task for not helping a US citizen escape an “intolerable” situation in Colombia’s notorious La Picota jail.
Kaleil Isaza Tuzman, a serial entrepreneur charged with market manipulation and accounting fraud, had asked Manhattan US Attorney Preet Bharara for help in expediting his extradition hearing — saying he has been beaten and feared for his life.
But Bharara claims there is nothing he could do as the US was bound by the US-Colombia extradition treaty. Plus, prosecutors claimed there was no real evidence Tuzman was beaten.
Tuzman is also a flight risk, prosecutors claim.
Judge Paul Gardephe chastised prosecutors — his voice rising at times — telling them to find a way to get Tuzman back to the US as soon as possible.
“I want someone to make it their number one priority” to get him extradited to a US jail, the judge said. “I don’t get the impression you are making it a priority!
“I believe that good people working together could find a creative solution here, but what’s lacking for whatever reason is the motivation,” he said.
Federal regulators have started to intensify their scrutiny of risky company loans extended by Wall Street’s biggest banks, just weeks after completing an annual audit of corporate lending, according to people with knowledge of the matter.
JPMorgan Chase & Co., Deutsche Bank AG and Credit Suisse Group AG are having their lending practices examined again, said the people, asking not to be identified because the information isn’t public. Canada’s Toronto-Dominion bank is also under review, they said. The move is the first step toward more frequent reviews of all lenders, the people said.
Banking regulators have been trying for more than two years to curb excessive risk-taking by Wall Street’s biggest lenders as they seek to limit bank exposure to loans made to heavily indebted companies. Their campaign is back in the spotlight as investors shy away from highly levered buyout loans. This week, a group of lenders led by Bank of America Corp. and Morgan Stanley postponed a $5.5 billion debt package backing the biggest leveraged buyout of the year after struggling to sell the debt to investors.
As part of its effort to reduce the taxpayers’ burden, Fannie Mae announced Friday that it completed its fifth and sixth credit risk-sharing transactions as part of its Credit Insurance Risk Transfer program.
The Credit Insurance Risk Transfer program shifts credit risk on a pool of loans to a panel of reinsurers. The deal helps to further diversify its counterparty exposure and reduce taxpayer risk by increasing the role of private capital in the mortgage market, Fannie Mae said.
Isaza Tuzman lived the thug life…
Isaza Tuzman spent more than four years at Goldman Sachs Group Inc., working in emerging markets arbitrage. In 1998, while still at the bank, he co-founded govWorks.com, a website that promised to link people to local municipalities. In the 2001 documentary “Startup.com,” he could be seen pitching venture capitalists and chatting with Bill Clinton at a summit about the Internet.
After govWorks collapsed in bankruptcy in 2001, Isaza Tuzman went on to head at least three tech startup firms, including one that eventually was renamed KIT Digital. He left the company in April 2012, a year before it declared bankruptcy.
In August, federal prosecutors in New York returned a sealed indictment against Isaza Tuzman. Prosecutors say that while at KIT Digital, he engaged in an elaborate scheme to mislead investors and regulators about the financial health of the company for at least three years. He’s also accused of secretly operating a hedge fund that artificially inflated the company’s share price and of using funds from KIT Digital to secretly invest in his hedge fund.