Since 2007, 471 U.S. banks have failed, nearly depleting the FDIC deposit-insurance fund with $92.5 billion in losses. Rather than sue, the agency has typically preferred to settle for a fraction of the losses while helping the banks avoid bad press.
[...]
Three years ago, the Federal Deposit Insurance Corp. collected $54 million from Deutsche Bank in a settlement over unsound loans that contributed to a spectacular California bank failure.
The deal might have made big headlines, given that the bad loans contributed to the largest payout in FDIC history, $13 billion. But the government cut a deal with the bank's lawyers to keep it quiet: a "no press release" clause that required the FDIC never to mention the deal "except in response to a specific inquiry."
The FDIC has handled scores of settlements the same way since the mortgage meltdown.
[...]
Overall, the FDIC collected $787 million in settlements by pressing civil claims related to bank failures from 2007 through 2012 — a fraction of its total losses.
[...]
"In the old days, the regulators made it a point to embarrass everyone, to call attention to their role in bank failures," said former bank examiner Richard Newsom, who specialized in insider-abuse cases for the FDIC in the aftermath of the S&L debacle. The goal was simple: "to make other bankers scared."
[...]
The ban on secret settlements was a provision in one of the laws passed after the S&L crisis. Although the measure doesn't require the FDIC to call attention to settlements, nondisclosure agreements like that with Deutsche Bank violate "the spirit of the law," said Sausalito, Calif., attorney Bart Dzivi, a former Senate Banking Committee aide who drafted the provision.
LA Times
[...]
Three years ago, the Federal Deposit Insurance Corp. collected $54 million from Deutsche Bank in a settlement over unsound loans that contributed to a spectacular California bank failure.
The deal might have made big headlines, given that the bad loans contributed to the largest payout in FDIC history, $13 billion. But the government cut a deal with the bank's lawyers to keep it quiet: a "no press release" clause that required the FDIC never to mention the deal "except in response to a specific inquiry."
The FDIC has handled scores of settlements the same way since the mortgage meltdown.
[...]
Overall, the FDIC collected $787 million in settlements by pressing civil claims related to bank failures from 2007 through 2012 — a fraction of its total losses.
[...]
"In the old days, the regulators made it a point to embarrass everyone, to call attention to their role in bank failures," said former bank examiner Richard Newsom, who specialized in insider-abuse cases for the FDIC in the aftermath of the S&L debacle. The goal was simple: "to make other bankers scared."
[...]
The ban on secret settlements was a provision in one of the laws passed after the S&L crisis. Although the measure doesn't require the FDIC to call attention to settlements, nondisclosure agreements like that with Deutsche Bank violate "the spirit of the law," said Sausalito, Calif., attorney Bart Dzivi, a former Senate Banking Committee aide who drafted the provision.
LA Times
Go get 'em, Liz. It's time to scare some banksters. And some government agencies.
...but hey, do what you want...you will anyway.
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