Tuesday, January 5, 2010

Moynihan's mea culpa way too little, way too late

Posted By on Tue, Jan 5, 2010 at 5:01 PM

As my colleague Rhi Bowman pointed out, new Bank of America CEO Brian Moynihan “admitted” in Raleigh yesterday that big banks are partly responsible for the economic crisis. In similar news, Hurricane Katrina admitted that it was partly responsible for New Orleans being “inconvenienced” in 2005.

Moynihan also “admitted” that banks had increased penalty fees on its customers and that "these fees hit a small group of customers particularly hard as the economy hit the skids." What Moynihan didn’t say is that those high penalty fees and loanshark-level interest rates would be going away anytime soon. It’s like someone “admitting” he’s stabbed you in the gut and then walking away without even taking the knife out.

Moynihan also said that "The vehicles and practices that got us here, and have cost our industry billions of dollars in capital through losses, have to be reformed." Which would almost be believable if BofA wasn’t fighting tooth and nail in Congress, along with other big financial interests, to derail attempts to mandate reform and pass a Consumer Protection Act. We’ve seen all too clearly the results of lax regulations in the banking industry, and Congress needs to move ahead quickly to get the wolves back in their pens, despite Moynihan’s apologetic PR moves.

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