The GOP has been attacking President Obama for all the Wrong Reasons: Benghazi Libyan embassy fight when the GOP had previously cut the State Departments defense funding. Or No New Taxes when there is general consensus that tax revenues have dried up and tax reform is way overdue. Or the constant return to Obama’s birth certificate. Yet for the past four years, the Obama administration has been handing an abysmal record on regulating and prosecuting Financial Institutions to the GOP on a tarnished platter for easy political pickings and exploitation. Just take a look.

The NYTimes has described how the Obama Administration has caved yet again to the Banks . This time its on on illegal Foreclosures. Here is the first part of the cave-in:

Federal banking regulators are trumpeting an $8.5 billion settlement this week with 10 banks as quick justice for aggrieved homeowners, but the deal is actually a way to quietly paper over a deeply flawed review of foreclosed loans ….To avoid criticism as the review stalled and consultants collected more than $1 billion in fees, the regulators, led by the Office of the Comptroller of the Currency, abandoned the effort after examining a sliver of nearly four million loans in foreclosure, the regulators and consultants said. Because they have no idea how many borrowers were harmed, the regulators are spreading the cash payments over all 3.8 million borrowers — whether there was evidence of harm or not. As a result, many victims of foreclosure abuses like bungled loan modifications, deficient paperwork, excessive fees and wrongful evictions will most likely get less money[than deserved]….It’s absurd that this money will be distributed with such little regard to who was actually harmed,”

In a second editorial the NYTimes describes the Foreclosure deal as a “Wrist Slap”:

In the face of widespread evidence of illegal foreclosure practices, federal regulators in 2011 told the big banks to investigate themselves. The banks had to hire consultants to review foreclosures in 2009 and 2010. If violations were found, they were supposed to reimburse wronged borrowers “as appropriate.” Regulators pledged to ensure that the reviews would be comprehensive and reliable. In practice, it was left up to banks to decide what constituted wrongful foreclosure and appropriate redress. Not surprisingly, after spending an estimated $1.5 billion on consultants, the banks have found little wrongdoing and provided no meaningful relief. Equally unsurprising, regulators will let the banks off with a wrist slap for their failure to execute credible and effective reviews. This week, the Federal Reserve and the Office of the Comptroller of the Currency reached a deal with 10 banks under which the regulators will end the reviews and the banks will instead provide $8.5 billion in aid to borrowers.

Even more disconcerting is this lets the banks legally and financially off the hook for all of their Foreclosure Misdeeds. All were done under the Obama administration and a most pliant Attorney General Eric Holder and equally compliant Treasury Secretary Timothy Geithner.

And these twoothless fairies have handed yet another financial regulation debacle to the GOP if they care to take up the failure to prosecute HSBC bank officials for a decade of money laundering. But the GOP is stuck on NO. No way they want to touch the issue of financial institution’s improprieties. Again, the instrument of choice by the Obama administration is the wrist-slap of a record $1.9B fine. But this fines is just the tiniest wrist slap because the $1.9B amount is made up in less than 2 months of HSBC’s record $13.7B in annual profits.



Now these two recent cases would appear to be just the ammunition Republicans need to a)prove that regulations under Obama are not working and b)they could defend the Middle Class more effectively than Obama and the Democrats. And indeed two days before the $8.5B in fines, the House under GOP control did ask for a delay in approving the agreement on foreclosures. But this turned out to be nothing as the deal went ahead. So the GOP appears to have given up any effort against the Big Banks on behalf of the 3.8million Americans affected by unfair bank foreclosures. But this a Foreclosure Deal that Salon and Bloomberg also found badly tainted. It is remarkable that such a bad deal could not entice Republicans in the House into action. And as for the HSBC lack of prosecutions, there is no Republican concerted opposition. So the professed needs to “get the housing market moving again” carried the day despite earlier promises to clean up the foreclosures mess “cleanly and fairly”.

This has a perverse echo in the recent HSBC Money Laundering Deal where the HSBC was declared to be “Too big to proescute” by Obama’s Attoney Generals office [and provoked this eloquent tirade by Mark Taibbi in Rolling Stone.]. But the details of the HSBC case provoked a great deal of consternation from Reuters , Jon Stewart’s the Daily Show, Blacklisted, Huffington Post, and CBS News. Political opportunity knocks for the GOP. The Republican reaction – Nada!

If you look at the record for 2012, one sees no letup in criminal activity by the banks. Many have suggested that the fact that there have been NO criminal prosecutions and no time served by any of the major bankers has removed a critical deterence- jailtime for executive. the only record of prosecutions in the past 4 years have been Ponzi scheme where the collapse of the Ponzi schemes presented the government with irrefutable evidence. yet the litany of malfeasance as we shall see below is long and disturbing.

Recent Banks Scandals and Criminal Activity

Deep in the recesses of Goldman Sachs there is undoubtedly a Financial Scandal Scorecard which keeps track of the risk and rewards associated with Banks criminal activities. That scorecard would look like this:

2012 – Financial Scandals

Now lets be clear again – these are some of the major malfeasance of the Financial Community since the 2007-2008 Financial Recession. After promises since 2009 in Congress, in TV commercials to the American public, and in a cross section of media reports, the Banks have shown a degree of financial criminal recidivism that would get you busted for a 30 year jail term in the criminal courts. And that is the problem. The federal financial regulators[everyone of the 17 federal agencies watching for financial malfeasance – could that be a problem?] have avoided and cutoff almost all criminal court prosecutions in favor of civil court cases. So the Rule of Law is mocked by “these largest fines in history” because a)the financial institutions will earn in 1 quarter or less enough to pay the fines, b)no criminal prosecution of finacial executives are pursued and c)the “admission of no guilt” as part of the settlement acts as a wall against others trying to secure redress in either civil or criminal cases. So no wonder the same financial criminal behaviour continues – the government has left the criminal element free to do as it pleases on the Street.

Summary

Since President Obama took office he has been dealing with an International Financial Community mostly based in Big US Banks that almost brought the World Economy to its knees. Those financial executives have been excused from any criminal prosecutions for wrong doing during the Mortgage Crisis and now for Money Laundering and Foreclosure Misdeeds. All of these crimes were callous and costly. How do you explain that? Even more vexing, how do you explain that the GOP, looking for a means of tarring and feathering the President in the recent presidential campaign, did not seize upon these miscarriages of justice? This kid glove treatment of the Financial Community has shaken the Rule of Law at its foundation – everybody must answer to the law from the lowest to the highest elites with the same and fair due process. Answer these questions of Democratic and Republican group decision making gone awry and you will have the tenor of the Times.