Roy Oppenheim’s commentary was originally published on Yahoo Homes! and is being redistributed on South Florida Law Blog with their permission
Those who cannot learn from history are doomed to repeat it.
We already know that the banks haven’t learned from their mistakes. They can and often will engage in risky behavior given the opportunity.
So why do regulators and those who have the chance to do something about it continue to give banks the wiggle room? Wall Street’s business model is inherently flawed, which is why banks are continually getting hit with hefty fines.
Yet banking lobbyists continue to hold immense clout in shaping regulation that will have a lasting impact on housing for years to come.
The business pages have been littered with headlines lately suggesting that governments still treat the banks like E.F. Hutton. When they talk, regulators still listen; case in point, the Basel Committee on Banking Supervision easing up on certain liquidity requirements in the Basel III rule. There is a great deal of dense technical jargon that will quite frankly bore most of you but the takeaway is this — banks still get their way and will still be able to take as many risks as they want.
Back here in the States, new mortgage lending rules trotted out by the Consumer Financial Protection Bureau are supposed to curtail so-called “liar loans” by requiring a more vigorous income verification process.
Except that those new tougher standards will be eased in over the next few years rather implemented immediately, so for the meanwhile it is business as usual.
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