Originally posted in the Huffington Post
WASHINGTON, Oct 4 (Reuters) – Former Federal Reserve Chairman Ben Bernanke said in a newspaper interview published on Sunday that more corporate executives should have been prosecuted for their actions leading up to the 2008 financial crisis.
Bernanke told USA Today that the U.S. Justice Department and other law enforcement agencies focused on investigating or indicting financial firms.
“But it would have been my preference to have more investigation of individual action, since obviously everything that went wrong or was illegal was done by some individual, not by an abstract firm,” Bernanke was quoted as saying.
via Bernanke: More Execs Should Have Faced Prosecution For 2008 Financial Crisis.
Earlier this year, the CFPB filed a complaint in Atlanta federal district court targeting an alleged debt collection scam in which not only were the debt collectors named as defendants (Debt Collectors) but three companies involved in providing payment processing services to the Debt Collectors were also named as defendants. One of those companies processed payments for the debt collectors and the other two companies were independent sales organizations (ISO) that marketed the processor’s services to merchants and were responsible for screening and underwriting merchants.
In its complaint, the CFPB charged the processor and ISOs (collectively, the Processors) with providing “substantial assistance” to the Debt Collectors’ unfair and deceptive conduct in violation of 12 U.S.C. Section 5536(a)(3). This section of the Consumer Financial Protection Act (CFPA) makes it unlawful for “any person to knowingly or recklessly provide substantial assistance to a covered person or service provider in violation of the provisions of section 5531 [which prohibit unfair, deceptive or abusive acts or practices]… and notwithstanding any provision of this title, the provider of such substantial assistance shall be deemed to be in violation of that section to the same extent as the person to whom such assistance is provided.”
The court recently issued an opinion denying a motion to dismiss filed by the Processors.
via Atlanta federal district court interprets CFPA standard for “substantial assistance” liability | Ballard Spahr LLP – JDSupra.
Written by Charles Eisenstein for YES! Magazine.
Today a burgeoning debt resistance movement draws from the realization that many of these debts are not fair. Most obviously unfair are loans involving illegal or deceptive practices—the kind that were rampant in the lead-up to the 2008 financial crisis. From sneaky balloon interest hikes on mortgages, to loans deliberately made to unqualified borrowers, to incomprehensible financial products peddled to local governments that were kept ignorant about their risks, these practices resulted in billions of dollars of extra costs for citizens and public institutions alike.
A movement is arising to challenge these debts. In Europe, the International Citizen debt Audit Network (ICAN) promotes “citizen debt audits,” in which activists examine the books of municipalities and other public institutions to determine which debts were incurred through fraudulent, unjust, or illegal means. They then try to persuade the government or institution to contest or renegotiate those debts. In 2012, towns in France declared they would refuse to pay part of their debt obligations to the bailed-out bank Dexia, claiming its deceptive practices resulted in interest rate jumps to as high as 13 percent. Meanwhile, in the United States, the city of Baltimore filed a class-action lawsuit to recover losses incurred through the Libor rate-fixing scandal, losses that could amount to billions of dollars.
Read more -> “Don’t Owe. Won’t Pay.” Everything You’ve Been Told About Debt Is Wrong by Charles Eisenstein — YES! Magazine.
Here are two videos that are oldies but goodies on the economy. The videos were created during the Great Recession but are applicable today.
via German Newspaper Accuses Spain’s Central Bank of Hiding Collateral Risks from ECB | Wolf Street.
By Don Quijones, Spain & Mexico, editor at WOLF STREET
Since the financial sectors of Southern Europe and Ireland hit the rocks during the height of Europe’s sovereign debt crisis, many of their respective banks have grown dependent on the generosity of the ECB – a generosity that, as Greece recently learned to its great cost, has its limits.
In the last three years, the banks of Europe’s biggest bailed out economy, Spain, have received ultra-low interest loans from the ECB worth some €140 billion. To obtain that liquidity, the banks are required by law to deposit collateral with the ECB. However, Germany’s leading business and financial newspaper Handelsblatt now reveals that some Spanish banks have received special treatment from Spain’s central bank, the Banco de España, some of whose officials have shown no qualms about bending the rules: