Yet another example of why Matt Levine’s Money Stuff is a daily must read for me:
It’s always a little embarrassing to talk about presidential candidates’ plans for financial regulation, since they seem so unlikely to be enacted even if the candidate wins, but at least Bernie Sanders seems to mean his attack yesterday on Wall Street corruption, too-big-to-fail banks, and $4 ATM fees. I mean, I wouldn’t hold my breath for a complete breakup of the largest banks within the first year of a Sanders presidency, but I don’t think that President Sanders would just forget about that promise, either. And honestly I feel like the president of the U.S., if he really put his mind to it, probably could get ATM fees capped at $2? Like I can’t point you to a constitutional provision that gives the president power to set ATM fees, but I just think that the bully pulpit of the presidency extends at least that far.
There is also stuff about sending bankers to prison, turning credit rating agencies into nonprofits, capping credit-card interest rates, monkeying with the Federal Reserve, and postal banking. Sanders’s frequent refrain is “that fraud is the business model on Wall Street. It is not the exception to the rule. It is the rule.” His speech yesterday adduced a lot of examples, taking the fact that “Since 2009, major financial institutions in this country have been fined $204 billion” as evidence that they’re just committing fraud all the time. And I suppose the fines are evidence that there is a lot of fraud. But they are not evidence that the business model is fraud: They are evidence that fraud is frowned upon, and zealously punished (or at least fined).
I like to point out that the area of American life whose business model is actually fraud — where the way to succeed is by lying, and where lying is not only consequence-free but constitutionally protected — is actually politics. If the government were fined for every time a politician lied about the benefits of a program, or for every time it funded tyranny or conflict, those fines would get above $204 billion really quick.
That said: “JPMorgan Chase & Co. will pay $48 million to settle the last in a series of missteps in its handling of foreclosures after the 2008 credit crisis, according to the Office of the Comptroller of the Currency.”
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Levine on Fed Day (December 16th, 2015)