Advice for President Obama on Holding the Banks Accountable

Max's advice for February 10, 2009

Dear President Obama,

Max grew up as the son of a man who knew 'ALL' the answers to the problems of the world. Max's father said so! Many times, his father let everyone know that anyone who didn't know that he had the answers was a turkey or a knucklehead.

The famous Ma Bell, the second most powerful force in the world (next to God of course), thought so much of Max's father's opinions, that she made him 'Supervisor of Troubles'. This is true!

The advice Max promised you, President Obama.

Hold U.S. banks and financial institutions accountable!

As a child, Max used to enjoy having a bank account. It was a little passbook account in a savings bank. Today the savings banks of those days are pretty much all gone, lost in the Savings and Loan crisis of a few decades back.

In those days, the good old days, banks paid a few cents interest for savings and a few extra for loans. There were usury laws that prevented banks from getting too greedy.

Those days have been replaced by a period where banks regularly shake down their customers at irrational rates. People who have paid their bills on time are suddenly struck with rates of twenty-four and thirty percent. Congress, who has a sworn duty to protect the people, has stood by silently while this greed continues.

The banks who have gotten in trouble are now using or asking to use huge sums of money that belongs to the public. The money they received in the fall of 2008 was clearly not used for the public good. In fact they have continued to gouge the public that is providing this bailout every day since this crisis began.

The people that elected you did not do so to see their savings, houses and taxes stolen from them by greedy bankers and Wall Street crooks.

It is time Mr. President that you hold their feet to the fire by referring those who have engineered this crisis to the Justice Department for prosecution. Thanks to the Congress they cannot be walked out on a rail for the usury they are committing. Separation of church and state precludes a justified stoning of these dishonest people who pretend to be honorable. The paperwork done by the bankers should be fully reviewed for truthfulness and accuracy as it is a legal representation to the U.S. government. Any one of these bankers who has misrepresented the facts in writing should be taken to task for fraud.

The same laws that govern people who kite a bad check should apply to the bankers. You shouldn't need much of an audit to find a few deceptive statements.

The financial organizations that have begged for a bailout have at the same time been busy punishing helpless borrowers. They still believe that their need is greater and more important than the people of the country.

From a legislative standpoint, Congress could redeem itself by taxing bonuses paid by public companies that have reported a loss for the year at an extraordinary rate. The money paid in such bonuses is stolen from common share holders and from the customers of the bank in added fees and lower dividends. It is stolen because if managers failed to do their job and keep the company profitable, there is no justification for a bonus.

The truth of the financial collapse is that financial managers on Wall Street and at the major banks failed to do the jobs that they were hired to do. Their incompetence may have been driven by greed, but it was still incompetence.

The boards that permitted the destruction of the value of the institutions are another issue that needs to be addressed. Having people who are on boards solely because of their titles or reputation does not make for good public policy. People who serve on a board must be held accountable for the action or inaction of the board. Limiting the number of public board positions a single person can hold might allow those who do serve to do the job they agreed to.

The bank management should be put under a microscope, particularly where it concerns their adherence to their fiduciary responsibilities.

Max wishes you well in all your efforts to clean up this mess.

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Link one is the general usury concept.

Link two is usury laws by state.

Link three is more consumer information on usury.