On May 31st, Manhattan prosecutors filed criminal charges against Abacus Federal Savings Bank and 19 employees. These are the first criminal charges against an actual bank associated with the financial crisis. This very small bank issued fraudulent mortgages, otherwise known as liar loans and sold them to Fannie Mae.
Abacus Federal Savings Bank, a small bank with a major presence in New York City’s Chinese community, and 19 of its former employees have been charged with inflating the qualifications of mortgage applicants to meet federal loan standards, a scheme that prosecutors say brought the bank tens of millions of dollars in ill-gotten fees and sent hundreds of millions of dollars in risky mortgages to the investment market.
The thing is liar loans were extremely common, so why would New York Prosecutors go after this small community bank instead of the larger fish? Politics and resources.
Bill Black in the below Bloomberg law interview says this prosecution will probably be our token sacrifice. In other words, don't expect Countrywide, notorious for liar loans and now part of Bank of America to be put in cuffs, doing the perp walk.
Another financial crisis, a prolonged recession, or changing political ideologies could cause a re-examination of the status quo and lead to a decision to break up the big banks. If that should happen, policy makers could well take another look at the Public Utility Holding Company Act of 1935 as a model for accomplishing such a breakup over a limited time span of, say, seven years. The political mood is already shifting. The 1980s mantras -- government regulation as problematic, free-market competition as an unquestioned good, financial engineering as worthwhile innovation and finance as more important than commercial and industrial enterprise -- are now being reconsidered. This could lead to a more responsible balance between government, finance and industry. Dodd-Frank, despite its length and complexity, is only the beginning of real regulatory reform. It's a continuation of the complexity of already overly complex financial and regulatory systems. What we need is a simple regulatory scheme to create a simpler banking system.
William Black, former S&L crisis regulator, is referencing the Flim-Flam man, never ending scam, coming out over the Financial collapse. The entire financial meltdown didn't need to happen if our government and regulators and especially the Federal Reserve had been doing their jobs. He calls the SEC criminally negligent. The below video clip is from the Lehman Brothers hearing in the House Financial Services Committee yesterday. The hearing is specifically the Lehman Brothers Holdings, Inc. bankruptcy examiner's report.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
Bill Black, an outspoken critic of the financial sector and lack of regulation, tells it like it is. Kansas City Federal Reserve President Thomas Hoenig also is telling it like it is on Financial Reform as well as the need to restructure the U.S. economy. First, below is an interview with Bill Black. Next is a FOX (yes I know) interview with Thomas Hoenig. If you can't stomach FOX, there is an print and audio interview on the Huffington Post, or listen (last media item in this post) to the raw audio interview.
Bottom line, these two men are speaking out and speaking out loudly with some plain truth and good old fashioned common sense. Bravo!
On May 31st, Manhattan prosecutors filed criminal charges against Abacus Federal Savings Bank and 19 employees. These are the first criminal charges against an actual bank associated with the financial crisis. This very small bank issued fraudulent mortgages, otherwise known as 
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It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
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