The nation’s largest banks paid fines totaling about $110 billion for their role in inflating a mortgage bubble that helped cause the financial crisis. Yesterday, the Wall Street Journal exposed that nearly half of that money—$49 billion dollars—has been pocketed by the federal government and has not been paid out to homeowners.
Here is the link to the WSJ article, although you will need to be a subscriber in order to read it. www.wsj.com/… I learned about the article because it was also reported by Amy Goodman yesterday on Democracy Now! as well as by Fortune magazine. Here are those links:
www.democracynow.org/… (scroll down to the bottom of the page)
fortune.com/…
30 settlements with big banks yielded about $110 billion dollars. Fortune used the WSJ article to provide a breakdown of where the money has gone:
- A huge chunk, $49 billion of the funds, are with the Treasury Department.
- $45 billion was put aside for consumer relief.
- $10 billion was set aside to be used for housing-related federal agencies and to whistleblowers who called banks out. Some of the funds were also go back to the Treasury.
- $5.3 billion went to states, which appeared to use the money as they saw fit, including directing the money to pension plans which were hit hard by the fallout from mortgage-back securities.
- $447 million was given to the Justice Department, which had a role negotiating with banks.
- Some $1.2 billion could not be tracked down or is unaccounted for.
It’s not exactly clear what Treasury is doing with its $49 billion dollar portion of the bank’s mortgage fines. A spokesman for the Treasury told the Wall Street Journal that it is being spent “as Congress authorizes.”
Democracy Now! reported last night:
while about $45 billion did go to homeowner relief, even more of the settlement money, about $50 billion in total, has been simply pocketed by the federal government itself, with almost no disclosure of how the money is being spent.
I have relied on the Democracy Now! and Fortune articles. If any readers here have access to the WSJ article and can post further information, that would be appreciated. Here’s that link again: www.wsj.com/...
