Remember back in 2008 when the U.S. government decided unilaterally to bail out the “too big to fail” banks with your tax dollars?
Remember how upset many were?
Well, it looks like they still have cause to be angry: The New York Federal Reserve has been quietly protecting Bank of America (BofA) from any liability while giving away billions in potential legal claims, according to a recent New York Times article.
From the NYT:
That the New York Fed would shower favors on a big financial institution may not surprise. It has long shielded large banks from assertive regulation and increased capital requirements.
Still, last week’s details of the undisclosed settlement between the New York Fed and Bank of America are remarkable. Not only do the filings show the New York Fed helping to thwart another institution’s fraud case against the bank, they also reveal that the New York Fed agreed to give away what may be billions of dollars in potential legal claims.
The article goes on to explain how the New York Fed has protected BofA from claims brought against it by people affected by the back’s toxic mortgage holdings.
“The New York Fed, which oversaw a company called Maiden Lane II, which had the right to sue Bank of America over those holdings, could have reaped billions of dollars for taxpayers in claims. Instead they let them off the hook for almost nothing,” Gawker’s Max Rivlin-Nadler notes.
Basically, the New York Fed has absolved BofA of its role in the financial crisis, shooing away anyone trying to recoup their losses from the 2008 meltdown.
The Fed’s action “underscores that the more we learn about these bailouts, gifts and advantages that Wall Street gets, the clearer it becomes that one set of rules applies to the largest megabanks and another set of rules to the smaller financial institutions and the rest of the country,” Sen. Sherrod Brown (D-Ohio) told the NYT.
So, yeah, as Rivlin-Nadler notes, the bank bailouts never stopped. They’re just not voted on anymore.
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