Laws are for little people
From Fortune’s “Want to get away with murder? Become a bank”:
If you screw up big-time when you deal with a giant bank, you’re toast. If the giant bank screws up when it deals with you, it gets a do-over.
You miss a payment on your credit card or send it in a few days late, you get whacked. Forget to make a loan payment, your credit rating gets vaporized. But if a bank doesn’t do its job properly — for example, if you can’t get a knowledgeable and competent human on the phone to deal with a loan modification or a paperwork screwup because the bank is holding down back-office costs to save money — it ends up being your problem, not the bank’s.
It’s utterly shocking, even to a congenital skeptic like me, to see that giant institutions such as Bank of America (BAC, Fortune 500), GMAC, and J.P. Morgan (JPM, Fortune 500) were allegedly using misleading affidavits to oust people from their homes. Employees of these institutions — the “robo-signers” — repeatedly misled courts by saying they had examined documents they hadn’t examined and had reviewed documents they hadn’t reviewed.
If you or I as individuals did that, we’d be kicked to the curb by the legal system in about two seconds. If we said that we hadn’t wanted to spend the money to do things right — the real reason that robo-signers exist — it would take only one second for the system to whack us.
But how will the system deal with the big outfits that are found to have filed false information in court? They’ll be attacked, sued, and investigated, and you can bet that at some point their chief executives will be hauled in front of Congress for public show trials by posturing politicians. But in the end, I’m sure, these institutions and their CEOs will get what amounts to a slap on the wrist.
Posted by James on Saturday, November 13, 2010