U.S. banks earned $40.3 billion in the first quarter 2013 according to the Federal Deposit Insurance Corp. (FDIC), the highest ever for a single quarter and up 15.8 percent from the first quarter of 2012. Those banks include Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. Most of them have recovered with help from federal bailout money and record-low borrowing rates.
The Federal Reserve’s aggressive stimulus programs since the crisis have exerted downward pressure on short- and long-term interest rates, making mortgages and other loans cheaper. The Fed’s low interest-rate policies are intended to boost borrowing and spending to accelerate overall economic growth. Still, many banks have adopted stricter lending standards since the financial crisis, requiring higher credit scores, larger down payments and proof of employment. So while loans are a bargain, they are only available to those who can qualify. Yet banks continue to profit from the aftermath of the mortgage crisis by extracting hundreds of millions of additional revenue and reduced costs by prolonging and manipulating the loan modification and foreclosure process at the expense of investors and borrowers.
In a rare show of humanity, the banks collectively thanked individual American Taxpayers with a heartfelt letter and a free glossy calendar offer featuring top financial industry CEOs:
“The financial services industry remains profoundly grateful to the majority of U.S. Taxpayers for their perpetual financial illiteracy, their superficial engagement in democracy and their general indifference to our profound influence over elected representatives and regulators. Much thanks for enabling the financial services industry to profit from the creation of the mortgage bubble, for the billion dollar benefits the TARP bailout and for the perpetual windfall of profit that flows from the collapse of the real estate market. Special thanks for ignoring the U.S. Senate’s denial of court determination of loan modifications. Your continued trust in our ability to manage and manipulate the profitable HAMP loan modification program is a tribute to your short attention span and commitment to our enduring prosperity.
We couldn’t have profited without you!”
On Tuesday, Moody’s Investors Service said it had raised its outlook for the U.S. banking industry from “Negative” to “Stable,” the first increase in five years. The rating agency said sustained economic growth and a better jobs picture will help banks over the next 12 to 18 months. Moody’s was paid by the Banks to provide favorable ratings of Mortgage Backed Security Bonds, ignoring that the investment vehicles were actually filled with risky loans designed to result in default, as practice that remains legal today. The free “Keep on Cheatin’ On!” calendars can be picked up at bank branches through April 1, 2014.