Saturday, October 13, 2012

The hidden cost of government settlements - The Washington Post

The hidden cost of government settlements - The Washington Post: When Bank of America agreed in December to pay $335 million to resolve federal charges that its mortgage-lending arm discriminated against black and Hispanic borrowers, government officials hailed it as the largest fair-lending settlement in history. But, in fact, the banking giant has the right to a massive discount on the payout. Thirty-five percent of the settlement is deductible. That means Bank of America could wind up saving $117 million on its tax bill.
Nice. We, the taxpayers, get to subsidize the settlements paid by banks for their bogus lending practices. Thanks to Mystery Reader for this engine-starter.

1 comment:

Anonymous said...

Well the "taxpayers" are also getting the $335 million from Bank of America to begin with.

You gotta frown at these governmental institutions feigning to be fighting "for the people". All they do is collect an abuse tax whenever public sentiment reaches a certain threshold. Did the black and Hispanic borrowers identified by the government collect a dime? No of course not. They just had another institution make a buck off of them.