Breaking the Law and Not Giving a Shit

Jump

***

And the banksters continue to screw us all:

In the netherworld of consumer debt, there are zombies: bills that cannot be killed even by declaring personal bankruptcy.

Tens of thousands of Americans who went through bankruptcy are still haunted by debts long after — sometimes as long as a decade after — federal judges have extinguished the bills in court.

The problem, state and federal officials suspect, is that some of the nation’s biggest banks ignore bankruptcy court discharges, which render the debts void. Paying no heed to the courts, the banks keep the debts alive on credit reports, essentially forcing borrowers to make payments on bills that they do not legally owe.

The practice — a subtle but powerful tactic that effectively holds the credit report hostage until borrowers pay — potentially breathes new life into the pools of bad debt that are bought by financial firms.

Now lawyers with the United States Trustee Program, an arm of the Justice Department, are investigating JPMorgan Chase, Bank of America, Citigroup and Synchrony Financial, formerly known as GE Capital Retail Finance, suspecting the banks of violating federal bankruptcy law by ignoring the discharge injunction, say people briefed on the investigations.

The banks say that they comply with all federal laws in their collection and sale of debt.

Still, federal judges have started to raise alarms that some banks are threatening the foundations of bankruptcy.

Judge Robert D. Drain of the federal bankruptcy court in White Plains said in one opinion that debt buyers know that a bank “will refuse to correct the credit report to reflect the obligor’s bankruptcy discharge, which means that the debtor will feel significant added pressure to obtain a ‘clean’ report by paying the debt,” according to court documents.

I mean, it’s only a court order, right?

Look, we all know how this is going to play out. They’ll be investigated, determined to be guilty, they’ll make a deal where they pay a pittance in fines, and maybe, if we are lucky, stop the practice for a while and move on some new and novel way to screw us, and then get back to business as usual. Meanwhile, the fines will come nowhere near to the profits they made, and all the while bankster friendly politicians will re-write the laws to make what they were doing legal or to further weaken regulation so next time they won’t get caught or we won’t have the means to investigate them. All the while, we’ll be heaping praise on human detritus like Jamie Dimon.

If you are a sociopath, what the banks are doing make complete and total sense. They’re just responding to the incentives we have created for them.






43 replies
  1. 1
    Belafon says:

    And I’m pretty sure a lot of people affected by this voted for Republicans because there’s just too much gridlock with Obama as president.

  2. 2
    Cervantes says:

    They’re just responding to the incentives we have created for them.

    It’s a little worse than that. They have created the incentives for themselves.

  3. 3
    JPL says:

    Leave our job creators alone.
    Who knew that trickle down meant just another way to p.iss on you.

  4. 4
    Lee Rudolph says:

    Richard Mayhew’s post title below gives me an idea. I’d be very happy to help subsidize crosses for these thieves.

  5. 5
    madmommy says:

    My mom and step-dad went through bankruptcy and are dealing with this, as well as fighting with the VA over disability designation. They also vote straight GOP every time the polls open,
    so of course all the crap they are dealing with is the fault of Obama. It’s maddening.

  6. 6
    Jebediah, RBG says:

    Goddammit, the fines have got to be MORE than the profit made by the bad actions. You don’t get to keep ANY ill-gotten gain plus you get punished by losing a little of your “legitimate” profits. I HAVE SPOKEN! Make it so, awesome new Congress unaffected by gridlock or partisanship!

    No, I amn’t holding my breath.

  7. 7
    Cervantes says:

    @JPL:

    Who knew that trickle down meant just another way to p.iss on you.

    That was in the vernacular in the 1930s.

    Plus an even earlier incarnation of “trickle down” economics was called the “horse and sparrow” theory: give the horse all the oats and eventually there will be some on the ground for the sparrows.

  8. 8
    Michael Bloom says:

    Cervantes is absolutely correct: “we” did not create these “incentives” (i.e. loopholes). They know what they’re doing, this is their playground, and they know what sorts of rule changes will allow them to legitimize these sort of scams, and their lobbyists are very very good at arranging to weasel this stuff into the law. And according to the Powell Memo, this is how our government is supposed to function.

    Oh, and Cervantes is further correct about the horse and sparrow analogy, which my dad used to tell me was common sense during the Great Depression. And how it really was supposed to work was that the sparrows could easily peck the incompletely digested oats out of the horses’ road apples. And that’s our future too, I guess.

  9. 9
    Betty Cracker says:

    @Belafon: That would be silly, of course, but I could hardly blame anyone who didn’t think the Democrats would be much better on this issue.

  10. 10
    Cervantes says:

    @Michael Bloom:

    the horse and sparrow analogy, which my dad used to tell me was common sense during the Great Depression

    Yes, that analogy is from the late 1800s.

  11. 11
    Judge Crater says:

    Get the money changers out of the temple! All these big banks should be broken up. They are a threat to our individual and collective financial security. The sight of a manacled Jamie Dimon being led out of JPM might deter some of this law breaking.

    And this is only the tip of the iceberg of the kleptocracy that operates around us. CNBC gave 10 minutes to the issue of Coca Cola management siphoning off billions from shareholders with a three-card monte game of stock options and phoney performance incentives. Jeez, we’re screwed.

  12. 12
    rikyrah says:

    @madmommy:

    My mom and step-dad went through bankruptcy and are dealing with this, as well as fighting with the VA over disability designation.

    My heart was swelling with empathy.

    They also vote straight GOP every time the polls open,

    Empathy gone…phuck ’em.

  13. 13
    Judge Crater says:

    If you read the whole article you see that the banks are selling these now voided debts to debt collectors. Jeezus h christ.

    And the debt collectors will buy them cause the banks fuck with the credit reports. The mafia could learn from this kind of extortion.

  14. 14
    Ruckus says:

    @Judge Crater:
    The mafia has ethics. They aren’t the same ethics that some of us think are good ethics but they have a code of ethics. Not one big bank/corp or even most republicans any more have close to the ethics that the mafia holds.
    And the main ethic that the mafia holds is that if you screw the golden goose too hard it will stop doing whatever and there go the profits. Contrast that with our current monetary/capital system.

  15. 15
    Cervantes says:

    @Judge Crater:

    CNBC gave 10 minutes to the issue of Coca Cola management siphoning off billions from shareholders with a three-card monte game of stock options and phoney performance incentives.

    That’s good. The shareholders should hold management to account.

    But did CNBC also find a minute or two to address Coca-Cola’s atrocious human-rights record? For decades in Latin America and elsewhere — Colombia, Guatemala, Zimbabwe — union leaders and their families have been murdered, raped, and tortured for wanting to improve labor conditions in facilities owned by Coca-Cola and its local associates.

    When a resolution came up some years ago calling for the company to adopt and enforce a pro-human-rights code of conduct, unions around the world supported it but those self-same shareholders joined management and the board in rejecting it.

  16. 16
    Shalimar says:

    @Jebediah, RBG: Goddammit, the fines have got to be MORE than the profit made by the bad actions.

    Fines are never going to be enough. Ignoring a court order is contempt. Force the banks to send a representative to the hearing in addition to their lawyer, give the representative 30 days to have the discharged debt removed from the credit report. If the discharged debt ever shows up on a credit report again after that 30 days, the representative goes to jail for contempt of court until the bank proves that the discharged debt has been removed. Put a few thousand bank employees in jail and this particular type of fraud will go away.

  17. 17
    azlib says:

    Stories like this is why we needed a strong and independent regulatory structure. If people who get caught in these situations had a clue they would demand stronger regulations and oversight. Sadly, a lot of voters do not make the connection.

  18. 18
    beergoggles says:

    I’m sure the Dems will pass a bill to legalize this shit in order to ‘help’ a fellow congressperson.. just like KXL. They can’t help but make it more attractive to throw my vote away on a third party.

  19. 19
    samiam says:

    I see the do nothing armchair expert on anything and everything that makes him cynical is now putting on his federal bankruptcy law hat.

  20. 20
    Judge Crater says:

    @Cervantes: No CNBC is mostly a mouthpiece for the corporatocracy . They don’t give a shit about labor in the U.S. much less in central America. The only reason they addressed the issue is because a mutual fund company has drawn attention to the problem. The CNBC Squawk Box crew was its usual big-money friendly self. The Coke board of directors is composed of the usual collection of plutocrats including Warren Buffet’s son. In this case, the board and the CEO are even screwing the shareholders.

  21. 21
    CONGRATULATIONS! says:

    CNBC gave 10 minutes to the issue of Coca Cola management siphoning off billions from shareholders with a three-card monte game of stock options and phoney performance incentives.

    @Judge Crater: Huh. As a Coke shareholder, one, I didn’t know about this, and two, where can I join the shareholder lawsuit?

  22. 22
    Tsukune says:

    Why can’t an ambitious prosecutor in a state with a budget deficit just use civil asset forfeiture on one of these asshole banks after getting a minor conviction? Take the whole bank, and sell it with a new IPO to raise money for margarita machines or hummers.

    Then tell the shareholders to go sue the old board of directors to get their money back.

  23. 23
    Tokyokie says:

    @Shalimar: I’m good with that, but include the acting CEO, and his acting sucessor once that guy’s jailed.

  24. 24

    @Shalimar:
    Sounds like a good plan, but make it the CEO rather than any old representative. If you threaten some random representative, the individual cases will be dealt with, but the general practice will continue. Only when you continually threaten somebody important will the bank get the message to change their policy.

  25. 25
    Cervantes says:

    @Judge Crater:

    Exactly.

    Management should not be allowed to steal from the owners but, to paraphrase someone from above, there is a parallel universe in which my heart would be swelling larger with empathy for the owners.

  26. 26
    Judge Crater says:

    @CONGRATULATIONS!: There is no shareholder lawsuit yet. Here’s a link to the controversy:

    Coke ripoff

  27. 27
    AnonPhenom says:

    “The banks say that they comply with all federal laws in their collection and sale of debt.”

    So bankster lawyers will argue for them that “the credit reports are simply a history of the individuals payment record, and of course that individual is under no obligation to pay back the debt that the bankruptcy court has cleared. I mean, just because we’re moving to a cashless society (where police can simply take your cash without probable cause) dosen’t mean everybody has to use the banking system’s credit products. If someone would rather live in poverty, well … that’s their choice. Amirite?”
    And when/if a court finally rules against them, the banksters will pay a fine ‘while admitting no wrong-doing’ , accept it as the price of doing business and move on to the next grift.

  28. 28
    Snarki, child of Loki says:

    @Lee Rudolph: “Richard Mayhew’s post title below gives me an idea. I’d be very happy to help subsidize crosses for these thieves.”

    In the current budget situation, there isn’t enough lumber funding for “crosses”, so we’ll just have to institute a 50% cut and go with “heads on sticks”.

    The more that Banksters evade legal consequences for obvious crimes, the more the justification for extra-legal consequences.

  29. 29
    jonas says:

    Along the same lines, NPR has been running a good investigative story this week about scofflaw mining companies who are cited for safety violations, fined, and then just refuse to pay the fine and there’s apparently not much the agencies who deal with this stuff can — or want — to do.

  30. 30
    NCSteve says:

    Luckily we also have class actions to create a second front on cases like this. Which means a handful of class action specialist firms will file a class action, get themselves appointed national class counsel on the basis of their impeccable credentials and extensive experience handling class actions, file a very impressive complaint, and then immediately settle the case in return for five dollar gift certificates to Denny’s for everyone who writes in and asks for one, and fifty or sixty million in attorney fees for themselves, which some Republican-appointed judge will approve.

  31. 31
    Kay says:

    They should stop making the deals on fines. At some point you really corrode the whole idea of equal justice.

    Take them to court. Even if we lose there should be some kind of public hearing.

    90% of people follow the law voluntarily. That has to continue, because if 90% of people start to believe there are two sets of rules, why should anyone play by them? There aren’t enough regulators or cops to manage this if that 90% number starts to drop. They have to believe it works, mostly. It’s MOSTLY consent. It’s voluntary compliance, for most people.

    My father used to say “what if everyone did that”? when we did something against the rules that damaged someone else out of selfishness or self-interest. It’s a pretty important concept for civil society. They will reap the fucking whirlwind if they don’t start prosecuting some of these people, win or lose.

  32. 32
    FromTheBackOfTheRoom says:

    Now hold on wiseguy, you’re calling Obama & Holder sociopaths because they clearly feel that “…what the banks are doing make complete and total sense. They’re just responding to the incentives we have created for them.”? The bankster’s wrists must smart from all the slapping over the last 6 years.

  33. 33
    RaflW says:

    @OP:

    They’ll be investigated, determined to be guilty, they’ll make a deal where they pay a pittance in fines, and maybe, if we are lucky, stop the practice for a while and move on some new and novel way to screw us

    No shit.

    The same banks that got caught on the LIBOR ratefixing and got slapped with an “ouch that hurt … a tiny bit” set of fines, well they just got done for another $4 Bn in fines (aka a pin prick), this time for fixing exchange rates. They continued to engage in illegal exchange rate fixing right into 2014, two years after the LIBOR scandal.

    The banks are deeply, possibly irrevocably corrupt. But the GOP tells us that market capitalism is self-regulating! Well, ok, then. I feel better.

  34. 34
    RaflW says:

    @Jebediah, RBG:

    Jail. For many of the offenders. And not some minimum-security Adirondack summer camp. Hard time. A few CEO perp-walks would be nice to see.

  35. 35
    rikyrah says:

    @Ruckus:

    The mafia has ethics. They aren’t the same ethics that some of us think are good ethics but they have a code of ethics. Not one big bank/corp or even most republicans any more have close to the ethics that the mafia holds.

    so true.

  36. 36
    Lurking Canadian says:

    @Tsukune: This! Take the whole fucking bank. Story on LGM last week was about the parents who lost their house because junior sold 40 bucks of pot on the porch. If you can do that…

  37. 37
    daverave says:

    Silly boy, there will be no determination of guilt even if there are token fines… that’s the way the corporatocracy rolls. “Humongosociopatic Bank reached a settlement today with the DOJ and agreed to pay a $300 fine but all parties agreed that a finding of guilt was not required.”

  38. 38
    chrome agnomen says:

    i will gladly man the machine guns when these fuckers go up against the wall.

  39. 39
    catclub says:

    @RaflW: anybody else hear the report on coal mines not paying their OSHA fines? Apparently there is no mechanism to force them to pay them, or to shut them down for non-payment. Now, who would have written the laws that way?

  40. 40
    Tree With Water says:

    Here’s a huge piece of the puzzle that goes a long way to explain lawlessness in today’s America:

    David Kurtz posted this today at Salon.com:

    Linda Greenhouse is a outstanding reporter who has covered the Supreme Court for many years. The usually subdued Linda Greenhouse, who covered the Supreme Court for The New York Times for years, is apoplectic about the court’s surprise decision to take up Obamacare subsidies even as the circuit courts are still grappling with the issue.

    Here’s a sampling:

    This is a naked power grab by conservative justices who two years ago just missed killing the Affordable Care Act in its cradle, before it fully took effect.
    There is simply no way to describe what the court did last Friday as a neutral act.
    So this case is rich in almost every possible dimension. Its arrival on the Supreme Court’s docket is also profoundly depressing. In decades of court-watching, I have struggled — sometimes it has seemed against all odds — to maintain the belief that the Supreme Court really is a court and not just a collection of politicians in robes. This past week, I’ve found myself struggling against the impulse to say two words: I surrender.

  41. 41
    Cervantes says:

    @Tree With Water: Quoting David Kurtz:

    Linda Greenhouse is a outstanding reporter

    No question about it.

  42. 42
    Tree With Water says:

    @Cervantes: Yes she is. Back when I used to watch PBS NewsHour I’d be all ears when she appeared. Nowadays if I see her byline, I’ll read it.

  43. 43
    Cervantes says:

    @Tree With Water:

    You might enjoy the article she wrote years ago about Madonna, her (daughter’s) iguana.

Comments are closed.