Holder: Banks Too Big to Fail and Too Big to Jail
This article was written for The South Florida Law Blog by Roy Oppenheim.
U.S. Attorney Eric Holder, the man charged with upholding the laws of this country, has finally recognized the elephant in the room.
During a Senate Judiciary Committee meeting this week, Holder finally admitted what the rest of us have been saying for a long time: There are banks in America that are too big to fail!
Ironically, American Banker, the very same publication read by those Holder criticized, was among the first to report the news.
Said Holder: “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy, perhaps even the world economy.”
Sadly, he offers no solutions to what has become an epidemic of fraud that led to one of the worst economic crisis in our country. By allowing banks to perpetrate fraud by selling mortgage securities they knew were not worth the paper they were written on, the Justice Department, in a way can be considered just as guilty for failing to hold banks to the fire.
It’s like the courts saying a murderer can’t be prosecuted because he is 6’9”, weighs 400 pounds and is too big to jail. Holder’s argument is simply not defensible.
So, now that the elephant has been acknowledged what are we going to do about it? The logical response would be to break up the banks – but as Neil Sedaka sings “Breaking up is hard to do.”
While folks like Louisiana Senator David Vitter and Ohio Senator Sherrod Brown have proposed legislation to break up banks, Florida lawmakers are pushing to give them even more power.
House Bill 87, filed by Naples, Fla. Rep. Kathleen Passidomo, is a prime example of how some lawmakers are willing to give the banks the upper hand – particularly when it comes to foreclosures.
As I have previously stated, this bill essentially will not only expedite the foreclosure process, tossing people out of their homes faster, but will give banks new rights to make it happen.
Under HB 87 banks would not have to prove they have the right to foreclose, it will be up to the homeowner to prove the banks don’t.
Holder just confirmed for us that banks can’t be trusted. He has joined a growing chorus of people in Washington and around the country who have been singing that same song, myself included.
I can think of no other reason lawmakers in Florida would allow HB 87 to pass other than the banks have feathered the nests of those in our state capitol and it’s gotten so cushy no one is willing to ruffle those feathers. It’s time for lawmakers in our nation’s and state capitol to rustle up some courage and take a stand by refusing to give banks carte blanche over our economy.
Real estate attorney Roy Oppenheim left Wall Street for Main Street, founding Oppenheim Law along with his wife, Ellen in 1989 in Fort Lauderdale, Florida, and is vice president of Weston Title and creator of the South Florida Law Blog, named the best business and technology blog by the South Florida Sun-Sentinel. Follow Roy on Twitter at @OpLaw or like Oppenheim Law on Facebook.