We live under the unfortunate false assumption that the money we make and put in the bank is ours. That we can access it at any time and that we have a right to it. After all this is America. Once upon a time, in America, the money you put in the bank (your money) could yield 5 to 6 percent interest. It was a form of shared compensation from the bank for using your money to invest or loan to other people and businesses.

Today, we are subjected to a never ending onslaught of fees, fines, and arbitrary charges that pop up when we least expect it. Some banks are seriously considering a tellers fee. If you walk into a bank and talk to a teller, you’re charged a fee.

It’s become almost comical to watch as the financial industry systematically ravages everyday people in this country and then watch as our elected officials oppose an organization that would protect their constituents from being fleeced.

Forty-four Republican Senators wrote a letter saying that they will block anyone from serving as Director of the newly formed Consumer Financial Protection Bureau — an agency that we, the consumer, need now more than ever.

Elizabeth Warren, recently addressed that issue in a recent HuffPost piece:

I hope that when those Senators next go home, they ask their constituents how they feel about fine print, about signing contracts with terms that are incomprehensible, and about learning the true costs of a financial transaction only later when fees are piled on or interest rates are reset. I hope they will ask the people in their districts if they are opposed to an agency that is working to make prices clear or if they think budgets should be cut for an agency that is trying to make sure that trillion-dollar banks follow the law.

For some reason we’ve all accepted these crimes as normal. That it’s normal to pay a bank for the privilege of using your money to gamble with and in some cases lose. That it’s normal to be charged ridiculous fees for things we were never told about; that arbitrary policies can pop-up at any time, and that banks can hold our money hostage.

In a recent post on Credit Slips, Adam Levitin, Professor of Law at Georgetown University, wrote about an arbitrary charge that he received when transferring money to his American bank account from Israel.

I recently received a reimbursement payment from an Israeli university for some travel expenses for a talk. The reimbursement was for $553 and was done via wire transfer. To my surprise, my account was only credited with $525. $28 was taken out as a fee. I inquired with my bank about this, and they said that they didn’t charge the fee — it must have been an intermediary bank. But the wire transfer receipt didn’t indicate any intermediary. In fact, I was surprised to hear that there was an intermediary — the transfer was from one of Israel’s largest banks to the largest bank in the United States.I’m rather puzzled by this fee. I didn’t agree to it, as far as I know (although who knows what is buried in my bank account agreement). There was no indication of how it was calculated, etc., or to whom it was paid, only an indication that $28 was taken out of the transfer.

I recently received the check from one of the largest banks in France as part of a life insurance policy from my recently deceased godmother — a bank check in euros. I deposited the check in my account nearly a month ago and have yet to have access to any of those funds. According to my bank, Eastern Bank of Massachusetts, the process of cashing a check from a foreign bank can take 6-8 weeks. A detail they didn’t tell me about until a few days later.

Eastern Bank executives playing with Richard Zombeck's cash

The bank in France however, claims that the funds were debited and made available on July 5 (a week after my deposit) but Eastern Bank claims it could take until the end July or longer. Meanwhile my money is floating around and being used to invest, speculate, and gain interest for someone else — in short, make someone else more money.

Eastern Bank is a regional New England bank with assets upwards of $6.7 billion. My wife and I chose it in order to avoid having to deal with behemoths like Bank of America and Wells Fargo. We figured, naïvely, that a bank of this size was small enough to care about customers, yet big enough to meet our business and personal needs.

Like with any bank however, as we see in countless stories of abuses by banks, the customer doesn’t matter and neither does their money, at least not once it becomes the bank’s money. I spent several hours over the course of a few days on the phone with customer service or in branch offices with absolutely no results and no explanation as to where my money is.

Neither Teresa Sarno nor Estela Budo, Eastern Bank Assistant VP and Assistant Manager respectively, could tell me where my check was or what process was used to retrieve the funds. Nor could they tell me when I could expect the funds. The only thing that they could tell me however, was that I would get the exchange rate that is posted on the day my funds were deposited to my account — which, as of today is significantly less than what it was the day I deposited it. The actual numbers are irrelevant, but let’s say that the amount I’ve lost so far (and the euro is dropping) is somewhere between a night on the town and an entire month’s pay, depending on what rung of the socioeconomic ladder you find yourself. I’m going to guess that Eastern Bank’s customers aren’t pulling in multimillion dollar Wall Street salaries, so the misuse and disregard for other people’s money in this case is borne by the people who can least afford it and have the most to lose. In all, it would have been cheaper for me to fly to France and cash the check myself.

What’s particularly concerning in all of this is that neither an Assistant Manager nor a Vice President of a significantly large bank can tell me where my money is, who has it, what bank or country it’s in, or why it’s taking so long to make it to my account. So really, the exchange rate is completely arbitrary and doesn’t quite follow the rules of reality.

If I were to use my debit card to buy a signed picture or a T-shirt of the Dalai Lama from a mountaintop gift shop in Tibet, the transaction would show up instantaneously, charges would be applied in the blink of an eye, and if I was for any reason overdrawn, I’d get hit with a fee far exceeding the price of a T-shirt.

A check, by definition, is a legal contract between two parties, given to a bank in good faith to act as an intermediary to retrieve those funds. It is not handed over to them to gamble with or “play the float” — where a bank holds your money, watches the ever fluctuating exchange rate, dumps it into your account at the lowest possible time and pockets the difference.

I called the Attorney General’s office, the Fed, the FDIC, the OCC, and the Division Banking to try to get answers about this. Not one of those agencies could provide an adequate response as to who handles these complaints and according to some who didn’t want to be on the record, the matter is unregulated.

We’ve been conditioned to think that a shoulder shrug and a simple “I don’t know what to tell you” or “I’m sorry you feel that way” from the VP of a bank is an acceptable answer to what happened to our money and that the intricate workings of the financial markets are too complex for us to understand, when the simple fact is that we have little control over our own money and we’re essentially just handing it over for them to play with until it’s no longer profitable. At which point they toss us whatever is left over.

Incidentally Bank of America and PNC, both of whom Eastern Bank apparently uses for foreign transactions, told me that as an account holder my money would be available to me the next day. Out of curiosity, I also called a handful of credit unions in the area, all of whom quoted me a time frame of 5 to 10 days.

I reached out to a few of the highly competent attorneys on our network at Home Preservation Network to ask about this very topic. Here’s one of the emails I got back from Florida attorney Matt Weidner:

What if Americans finally just got totally fed up, and every time they were abused they marched into court and filed suit?  Talk about a revolution. Talk about death by ten million cuts. Improper fee… lawsuit. Improper hold…. lawsuit. Lying on marketing material… lawsuit. Manipulate stock returns…. lawsuit.Our American court system is supposed to be a forum for redressing abuses right? Our entire country is grounded on the notion that there is a higher law and that the higher law is owned by the people, right?

Screw the elections. We’re all ignoring the third branch of government. In reality, the only one in which we have immediate, guaranteed, and very inexpensive access. I’m tired of hearing people complain without standing up and doing something — either symbolic or practical.
The law is not just for lawyers. Our courts are not just for attorneys. Our courts are FOR THE PEOPLE.

You really want to get their attention? Make these multi-national corporations face lawsuits for their bad conduct in every single county court in this country. Screw them and their $600/hour attorneys. Screw them and their call centers in India. File a small claims case and drag their asses into a dirty, cramped small claims court.

I’m thinking that an action like that, by the tens of thousands of people experiencing what I’m experiencing, might send a message. It’s clear that not everyone in America is cashing checks from foreign countries, but there are enough doing so that “playing the float” is more than likely a profit center worth tens of millions of dollars to the banks. There are more ways to rob people that holding on to foreign currency and certainly more ways to hold money hostage.

Once upon a time in America, people used to stand up for themselves and have the self-respect and dignity to take their business elsewhere when they knew they were getting screwed. At least there was a cop on the beat you could call when you were robbed and we protected our citizens. Today we hand the crooks the keys and help them load up the truck.

Congressman Brad Miller (D-N.C.) believes the Federal Housing Finance Agency should investigate a proposed $8.5 billion settlement between Bank of America and investors who lost money on toxic residential mortgage-backed securities to see if the settlement amount is too low.

The deal involves a settlement BofA reached with Bank of New York Mellon, which served as trustee for the 530 MBS trusts involved in the proposed deal. The mortgage-backed securities under BofA’s umbrella were originally tied to Countrywide Financial Corp., which BofA acquired three years ago.

Miller contends in his letter to FHFA Acting Director Edward DeMarco that the federal agency, in its role as conservator of Fannie Mae and Freddie Mac, has a duty to investigate the value of the proposed deal since both GSEs “have substantial investments in the RMBS subject to the proposed settlement and have already suffered losses on the RMBS.”

Rep. Miller writes “the proposed settlement is for $8.5 billion on RMBS with an initial par value of $424 billion. The unpaid principal balance on those RMBS is now $174 billion. The proposed settlement, therefore, is approximately 2% of the initial par value, and less than 5% of the unpaid principal balance.”

Miller said he’s concerned about the proposed settlement because once finalized, individual investors who disagree with the deal’s current terms will be unable to challenge it since “investors in the RMBS cannot petition to have their trusts excluded from the settlement so they can pursue their claims independently.”

Read more here

The U.S. government sued Deutsche Bank AG for more than $1 billion, accusing the German bank of defrauding it by repeatedly lying to obtain federal insurance guarantees on mortgage debt.

According to the complaint, Deutsche Bank and its MortgageIT Inc unit misled the government into believing their mortgages qualified for federal insurance, knowing they could make “substantial profits” when the loans were later sold.

In fact, the government said, the loan quality was so poor that nearly one in three mortgages defaulted, a percentage elevated by Deutsche Bank’s “dysfunctional” quality control.

The complaint, filed in U.S. District Court in Manhattan on Tuesday, marks the latest U.S. government push to hold the mortgage industry responsible for excesses that contributed to a 4-year-old housing slump and millions of foreclosures.

Deutsche Bank and other banks have come under harsh criticism for their mortgage practices. A report on April 13 by a U.S. Senate subcommittee faulted Deutsche Bank, Goldman Sachs Group Inc and others for deceiving purchasers about toxic mortgage debt they sold, quoting a top Deutsche Bank trader who referred to some of the collateral as “pigs.”

Last year, Goldman paid $550 million to settle federal fraud claims tied to a mortgage investment it offered.

The Deutsche Bank lawsuit is believed to be among the first targeting a major bank under the federal False Claims Act over alleged wrongdoing tied to mortgages.

“The U.S. is seeking redress for the financial crisis and is trying to find the culprits,” said Konrad Becker, a stock analyst at Munich-based bank Merck Finck.

Deutsche Bank shares closed down 2.1 percent at 43.25 euros in Frankfurt, after falling as much as 3.7 percent.

Read more here

“Inside Job” won the 2011 Academy Award for best documentary on Sunday night. The film’s director used his acceptance speech to delivery pointed criticism of Wall Street and the financial industry.

The Oscar buildup featured speculation about whether Banksy, a mystery man of the street-art world, might show up for his awards entry, “Exit Through the Gift Shop.” If he was at the Oscars, he did not declare himself.

But it was the topic on most people’s minds the last two years, the economy, that resonated among Oscar voters.

“Inside Job” director Charles Ferguson subjected Wall Street players, economists and bureaucrats to a fierce cross-examination to depict the economic crisis as a colossal crime perpetrated on the working-class masses by a greedy few.

His film examined the financial crisis of 2008. His speech lamented the lack of accountability three years later.

“Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong,” Ferguson said.

Read more and watch video here

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

“Everything’s fucked up, and nobody goes to jail,” he said. “That’s your whole story right there. Hell, you don’t even have to write the rest of it. Just write that.”

I put down my notebook. “Just that?”

“That’s right,” he said, signaling to the waitress for the check. “Everything’s fucked up, and nobody goes to jail. You can end the piece right there.”

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

This article appears in the March 3, 2011 issue of Rolling Stone. The issue is available now on newsstands and will appear in the online archive February 18.

The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What’s more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even “one dollar” just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick “The Gorilla” Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

Invasion of the Home Snatchers

Instead, federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing. To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice. “If the allegations in these settlements are true,” says Jed Rakoff, a federal judge in the Southern District of New York, “it’s management buying its way off cheap, from the pockets of their victims.”

Read more here

For old times’ sake, here’s former, disgraced Attorney General Alberto Gonzales, when asked by the Financial Crisis Inquiry Commission about mortgage fraud allegations. The FBI actually held press conferences about it during the Bush administration, in 2004 and 2005, “calling it pervasive’ and ‘on the rise.’” But,

[F]ormer attorney general Alberto Gonzales, who served from February 2005 to 2007, told the FCIC he could not remember the press conferences or news reports about mortgage fraud. Both Gonzales and his successor Michael Mukasey, who served as attorney general in 2007 and 2008, told the FCIC that mortgage fraud had never been communicated to them as a top priority. “National security . . . was an overriding” concern, Mukasey said.

What? Who? Me? I don’t remember that. Just a walk down memory lane. And perhaps instructive to current and future administration officials on those things happening on their watch.

Recent depositions have been helping eyes be opened to outright foreclosure fraud.

Most experts and people who pay attention (certain victims, some attorneys, some legislators, and a few judges) have known about the obvious foreclosure fraud by banks, but many more people are realizing the fraud by the banks and it is becoming more evident the banks are barely even practicing a real business; most FDIC-member banks and credit unions are flooded in deception, concealing documents, and just hiding.

One thing I have always questioned was their “numbers,” and how they came up with them. Look, I worked in the industry, so I saw numbers all day.

Summon Enron: What did Enron do and what made their fake business so suspicious?

Enron showed and disclosed to investors and the public a huge profit with high revenue. Oddly though, their cash flow was awkwardly low considering they were making so much money and ultimately such high profit.

Most banks are doing the same thing – with the obvious difference that they are getting nearly free money created through thin air to lend.

Most of the banks, on their lending side, use smoke and mirrors to hide their fraud through a company called Mortgage Electronic Registration System (MERS) and/or operate through established trusts called Pooling and Servicing Agreements (PSAs) for their loans from Real Estate Mortgage Investment Trusts (REMIC) pursuant to money they launder mostly from government-sponsored enterprises (GSEs) and the Federal Reserve System.

A big lie I’ve recently noticed is their fraudulent assignments with regard to financial reporting. Sure, most people know about how the banks fraudulently assign notes, but there is an aspect that is critical to understand here, that is being missed by most people, including experts. Banks are highly likely violating Internal Revenue Code Section 860, Subsection A through C, which has deals with deficiencies. In court, for example, banks are claiming that they transferred a note on one day, yet the information on file back at their corporate offices and even in court sometimes shows that the note was transferred or assigned to a different company on a different day. This all causes problems in tax reporting. How do we know they are being honest. Well, it is obvious they are not honest about it considering the documents do not match. And there is a clear reason for that. And when they do indeed sell a note (any kind of loan obligation), how do we know they are reporting that as revenue, especially considering their cash flow is so warped?

Read more here

By the time the conference call ended, it was nearly midnight at Bank of America’s headquarters in Charlotte, N.C., but the bank’s counterespionage work was only just beginning.

A day earlier, on Nov. 29, the director of WikiLeaks, Julian Assange, said in an interview that he intended to “take down” a major American bank and reveal an “ecosystem of corruption” with a cache of data from an executive’s hard drive. With Bank of America’s share price falling on the widely held suspicion that the hard drive was theirs, the executives on the call concluded it was time to take action.

Since then, a team of 15 to 20 top Bank of America officials, led by the chief risk officer, Bruce R. Thompson, has been overseeing a broad internal investigation — scouring thousands of documents in the event that they become public, reviewing every case where a computer has gone missing and hunting for any sign that its systems might have been compromised.

In addition to the internal team drawn from departments like finance, technology, legal and communications, the bank has brought in Booz Allen Hamilton, the consulting firm, to help manage the review. It has also sought advice from several top law firms about legal problems that could arise from a disclosure, including the bank’s potential liability if private information was disclosed about clients.

The company’s chief executive, Brian T. Moynihan, receives regular updates on the team’s progress, according to one Bank of America executive familiar with the team’s work, who, like other bank officials, was granted anonymity to discuss the confidential inquiry.

Whether Mr. Assange is bluffing, or indeed has Bank of America in its sights at all, the bank’s defense strategy represents the latest twist in the controversy over WikiLeaks and Mr. Assange.

The United States government has been examining whether Mr. Assange, an Australian, could be charged criminally for the release by WikiLeaks of hundreds of thousands of classified Pentagon and State Department diplomatic cables that became the subject of articles in The New York Times and other publications last month.

Read more here