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Banking Executives Get Congressional Treatment
By
Jen Chung
Published Feb 12, 2009
Modified Feb 12, 2009
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By
Jen Chung
Published Feb 12, 2009
Modified Feb 12, 2009
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The heads of U.S. banks who have received a combined $135 billion in Troubled Asset Relief Program funds were in the firing line of the House Financial Services Committee. When the executives were somewhat apologetic for the credit collapse—Morgan Stanley's John Mack said, "We are sorry for it. I am especially sorry for what's happened to shareholders [and the American public]. Clearly, as an industry, we have accountability and we're taking responsibility. I'll take responsibility for my firm."—many members of Congress took the Festivus-approach, by airing grievances.
Rep. J. Gresham Barrett (R-SC) asked Citigroup's Vikram Pandit to lower the credit card penalty interest rate (which averages at 24.5%): "Why can’t you do something like that? This country is in a recession headed for a depression. Why can’t you do something for them? Can you reduce that rate for a year or two?” Rep. Nydia Velazquez (D-NY) wondered why the banks aren't supporting legislation that allows bankruptcy judges to modify mortgages. And the Post reports how Rep. Michael Capuano (D-Mass) said, "Do you understand that it's a little difficult for my constituents to take, that you learned your lesson?" and was later dismissive of the executives' apologies, "Basically, you come to us today on your bicycles, after buying Girl Scout cookies and helping out Mother Teresa, telling us, 'We're sorry, we won't do it again. We didn't mean it. Trust us!'"
Bank of America's Ken Lewis came under fire for Merrill Lynch's extremely generous bonuses—over $3.6 billion worth, as Merrill was announcing a $15 billion loss during the 4th quarter (BoA now owns Merrill). Lewis said, "My ... involvement was very limited. Merrill] had a separate board, separate compensation committee and we had no authority to tell them what to do; just urge them what to do. So we did urge."
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Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
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