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Can’t those constantly-complaining consumer advocates ever be satisfied?
The government extracted a $10 billion payment from a dozen major mortgage lenders as punishment for their unlawful eviction of homeowners, yet consumer groups say it’s not nearly enough. Come on – $10 billion is real money!
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Well, yes – for you and me. But for Bank of America, Citigroup, Goldman Sachs, JPMorgan, and the eight others, $10 billion is not even .1 percent of their revenues for one year. And it’s certainly not enough to make these 12 scofflaws go straight.
Moreover, as pointed out by alert consumer watchdogs at US Public Interest Research Group, there’s another tricky hickey on this deal: The IRS is allowing the banks to treat the payouts to wronged homeowners as a cost of doing business, meaning the banksters will simply deduct most of the $10 billion from their corporate tax payments. Yes, that means that we taxpayers are being made to subsidize their “punishment.”
Angry about this coddling of criminals, Republican Sen. Chuck Grassley said, “The government is abetting the [bankers] behavior by not preventing the deduction,” adding “That’s unfair.”
Well, yes – as well as morally despicable and scummy. Also, unnecessary. Federal agencies have the authority to stipulate in these settlement deals that the price of bad corporate behavior includes the violators having to foot the entire penalty, with no portion of it passed to taxpayers.
Having that authority, government has a moral responsibility to use it – both to protect our public treasury and to make such legal settlements punitive enough that a corporate wrongdoer will hesitate to repeat the violation. To see the consumer group’s report on stopping these taxpayer subsidies for corporate penalties, go to www.uspirg.org.
“Government targets deductions on settlements,” Austin American Statesman, January 1, 2013.
“Taxpayers easing banks’ penalty costs,” Austin American Statesman, January 18, 2013.
“Deal Expected On Past Abuses In Home Loans,” New York Times, December 31, 2012.
“FORTUNE 500 Our annual ranking of America’s largest corporations,” www.cnn.com, 2012.