Federal Reserve System (FED)
- Homepage: http://www.federalreserve.gov/
February 2002: "The Federal Reserve, the central bank of the United States, was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Today the Federal Reserve's duties fall into four general areas:
- conducting the nation's monetary policy;
- supervising and regulating banking institutions and protecting the credit rights of consumers;
- maintaining the stability of the financial system; and
- providing certain financial services to the U.S. government, the public, financial institutions, and foreign official institutions."
November 2013: "The case began as a dispute over faulty loans between Bank of America and a group of institutional investors who held the Countrywide securities, including BlackRock, Pimco and the Federal Reserve Bank of New York. Early in settlement talks, Bank of America suggested bringing all investors in the 530 Countrywide trusts into the deal. Bank of New York Mellon agreed. This meant that even though the absent investors were not represented by lawyers at the bargaining table, they would be forced to abide by the terms of the settlement. Unlike the process that occurs in a class action, there was no opting out of this deal."http://www.nytimes.com/2013/11/17/business/who-has-your-back-hard-to-tell.html
June 2013: "The lack of regulation in the payroll card market, while alluring for some of the issuers, can potentially leave cardholders swimming in fees. Take the example of inactivity fees that penalize customers for infrequently using their cards. The Federal Reserve has banned such fees for credit and debit cards, but no protections exist on prepaid cards. Cards used by more than two dozen major retailers have inactivity fees of $7 or more, according to a review of agreements."http://www.nytimes.com/2013/07/01/business/as-pay-cards-replace-paychecks-bank-fees-hurt-workers.html
January 2013: 'What's most amazing about this isn't that Citi got so much money, but that government-endorsed, fraudulent health ratings magically became part of its bailout. The chief financial regulators – the Fed, the FDIC and the Office of the Comptroller of the Currency – use a ratings system called CAMELS to measure the fitness of institutions. CAMELS stands for Capital, Assets, Management, Earnings, Liquidity and Sensitivity to risk, and it rates firms from one to five, with one being the best and five the crappiest. In the heat of the crisis, just as Citi was receiving the second of what would turn out to be three massive federal bailouts, the bank inexplicably enjoyed a three rating – the financial equivalent of a passing grade. In her book, Bull by the Horns, then-FDIC chief Sheila Bair recounts expressing astonishment to OCC head John Dugan as to why "Citi rated as a CAMELS 3 when it was on the brink of failure." Dugan essentially answered that "since the government planned on bailing Citi out, the OCC did not plan to change its supervisory rating." Similarly, the FDIC ended up granting a "systemic risk exception" to Citi, allowing it access to FDIC-bailout help even though the agency knew the bank was on the verge of collapse.'http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout-20130104
November 2012: "Many Americans probably think the Dodd-Frank financial reform law will protect taxpayers from future bailouts. Wrong. In fact, Dodd-Frank actually widened the federal safety net for big institutions. Under that law, eight more giants were granted the right to tap the Federal Reserve for funding when the next crisis hits. At the same time, those eight may avoid Dodd-Frank measures that govern how we’re supposed to wind down institutions that get into trouble."http://www.nytimes.com/2012/11/04/business/one-safety-net-that-needs-to-shrink.html
December 2011: "And in 2008, in that moonlighting capacity, he orchestrated a deal in which the Fed provided $29 billion in assistance to help his own bank, Chase, buy up the teetering investment firm Bear Stearns. You read that right: Jamie Dimon helped give himself a bailout. Who needs to worry about good government, when you are the government?"http://www.rollingstone.com/politics/blogs/taibblog/a-christmas-message-from-americas-rich-20111222
October 2011: 'However, that lower price was still much too high, as the Federal Reserve well knew. The Fed had been established in 1913 in large measure to end the then widespread practice of banks’ charging a similar “interchange” fee for the use of paper checks. Those check interchange fees were slowing the growth of interstate commerce, and the Fed quickly prohibited them. The interchange fees that banks now charge stores for debit transactions are economically and functionally identical to the check interchange fees prohibited by the Fed almost a century ago.'http://www.nytimes.com/2011/10/07/opinion/debit-card-fees-are-robbery.html
July 2011: "What made the news surprising, of course, was that the Federal Reserve has rarely, if ever, taken action against a bank for making predatory loans. Alan Greenspan, the former Fed chairman, didn’t believe in regulation and turned a blind eye to subprime abuses. His successor, Ben Bernanke, is not the ideologue that Greenspan is, but, as an institution, the Fed prefers to coddle banks rather than punish them. That the Fed would crack down on Wells Fargo would seem to suggest a long-overdue awakening."http://www.nytimes.com/2011/07/26/opinion/26nocera.html
April 2011: 'Most Americans know about that budget. What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy. After the financial crash of 2008, it grew to monstrous dimensions, as the government attempted to unfreeze the credit markets by handing out trillions to banks and hedge funds. And thanks to a whole galaxy of obscure, acronym-laden bailout programs, it eventually rivaled the "official" budget in size — a huge roaring river of cash flowing out of the Federal Reserve to destinations neither chosen by the president nor reviewed by Congress, but instead handed out by fiat by unelected Fed officials using a seemingly nonsensical and apparently unknowable methodology.'http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411
May 2010: "The Durbin amendment gives the Federal Reserve new authority to regulate and limit the fees that businesses pay to card companies,. It specifically addresses payments processed through the Visa and MasterCard networks. American Express and Discover cards are not covered by the bill."http://www.nytimes.com/2010/05/15/business/15credit.html
January 2010: "While Congress and the Federal Reserve Board are considering eliminating some of the incentives brokers have to gouge borrowers, your best move is to hire a real-estate attorney to represent you in arranging the loan and purchase—a $500 to $2,000 expense. That's a good investment; foreclosure rates in the nine states requiring attorneys for real-estate transactions have been running at about one-fifth the national average."http://www.aarpmagazine.org/money/consumer_confidential.html
February 2010: "This week, the second phase of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (also known as the Credit CARD Act), which put into place a number of consumer protections, went into effect...the Federal Reserve has created an interactive Web site (http://www.federalreserve.gov/creditcard) to help cardholders understand the new safeguards."http://www.washingtonpost.com/wp-dyn/content/article/2010/02/24/AR2010022405094.html
February 2010: "In fact, the Fed became not just a source of emergency borrowing that enabled Goldman and Morgan Stanley to stave off disaster — it became a source of long-term guaranteed income. Borrowing at zero percent interest, banks like Goldman now had virtually infinite ways to make money. In one of the most common maneuvers, they simply took the money they borrowed from the government at zero percent and lent it back to the government by buying Treasury bills that paid interest of three or four percent. It was basically a license to print money — no different than attaching an ATM to the side of the Federal Reserve."http://www.rollingstone.com/politics/story/32255149/wall_streets_bailout_hustle
September 2009: "But during the years of the housing boom, the pleas failed to move the Fed, the sole federal regulator with authority over the businesses. Under a policy quietly formalized in 1998, the Fed refused to police lenders' compliance with federal laws protecting borrowers, despite repeated urging by consumer advocates across the country and even by other government agencies."http://www.washingtonpost.com/wp-dyn/content/article/2009/09/26/AR2009092602706.html
July 2009: "THE Federal Reserve has long been the odd man out in the American system of government — powerful, yet designed to be nonpolitical and neither checked nor balanced. Now two contradictory crosscurrents are swirling in Washington — one that would enhance the Fed’s powers and one that would curtail them."http://www.nytimes.com/2009/07/26/business/economy/26view.html
June 2009: "The administration’s plan, unveiled on Wednesday, would give the Federal Reserve greater supervisory authority over large financial institutions whose problems pose potential risks to the economic system. It would also expand the reach of the Federal Deposit Insurance Corporation to seize and break up troubled institutions. And it would create a council of regulators, led by the Treasury secretary, to fill in regulatory gaps."http://www.nytimes.com/2009/06/21/us/politics/21radio.html
July 2008: "[Treasury secretary Paulson's plan] Congress would lose some of its authority to oversee the companies, Fannie Mae and Freddie Mac....In recent days, the administration has proposed that the new regulator consult with the Federal Reserve, which looks at larger systemic risks. Congressional aides were discussing late last week whether the legislation should include that provision, which, in any event, does not give the Fed significant authority to alter new regulations."http://www.nytimes.com/2008/07/21/washington/21fannie.html
July 2008: "The sprawling financial and economic crisis is leading to expansion of the Federal Reserve's role, increasingly turning the central bank into a sort of all-purpose guarantor of the financial system."http://www.washingtonpost.com/wp-dyn/content/article/2008/07/16/AR2008071602655.html
March 2008: "•The Federal Reserve intervened to prevent the sudden collapse of Bear Stearns, an investment bank. But the Fed took on $29 billion worth of risk from JPMorgan Chase (which plans to buy Bear). That could expose the Fed – and by extension taxpayers – to a loss. The Fed is making other low-interest loans to Wall Street firms."http://www.csmonitor.com/2008/0331/p01s01-usec.html
June 2007: The Federal Trade Commission and the Federal Reserve were targeted in a House hearing to examine how errors occur on credit reports and how to assist consumers in correcting them. Congress passed legislation in 2003 that protected consumers against credit errors, but neither has been fully implemented by the six regulatory agencies that cooperate to translate laws into industry standards.http://www.washingtonpost.com/wp-dyn/content/article/2007/06/19/AR2007061902220.html
June 2007: The US Federal Reserve got into the act last month, proposing more relevant and readable disclosure of credit card terms.http://www.csmonitor.com/2007/0604/p17s02-wmgn.htm
May 2007: But the Federal Reserve disagreed. It changed its rules to place greater responsibility on banks that first accept unsigned checks, but has permitted their continued use.http://www.nytimes.com/2007/05/20/business/20tele.html
Role Name Type Last Updated Financial Supporter of (past or present) Bear Stearns Companies Organization Mar 18, 2008 Cooperation (past or present) Bureau of Engraving and Printing (BEP) Organization Dec 15, 2008 Research/Analysis Subject Inner City Press (ICP) Organization Feb 24, 2008 Owned by (partial or full, past or present) US Federal Government - Independent Agencies Organization May 4, 2005 Opponent (past or present) Wells Fargo Financial Organization Aug 6, 2011 Organization Executive (past or present) Organization Head/Leader (past or present) Ben S. Bernanke Ph.D. Person Apr 28, 2006 Employee/Freelancer/Contractor (past or present) Prof. Sandra E. Black Ph.D. Person Mar 27, 2008 Organization Executive (past or present) Timothy F. Geithner Person Jun 20, 2009 Organization Head/Leader (past or present) Dr. Alan Greenspan Person Research/Analysis Subject Prof. Stephen K. Happel Ph.D. Person Apr 10, 2010 Advised by (past or present) Prof. Robert C. Hockett Esq. Person Jul 30, 2013 Possible/Unclear Ray Lee Hunt Person Sep 28, 2007 Employee/Freelancer/Contractor (past or present) Prof. Cornelius Hurley Esq. P.M.D. Person May 19, 2010 Advised by (past or present) Prof. Patricia A McCoy Esq. Person Mar 26, 2010 Advised by (past or present) Edmund "Ed" Mierzwinski Person Nov 4, 2005 Employee/Freelancer/Contractor (past or present) Prof. Alicia H. Munnell Ph.D. Person Aug 17, 2006 Organization Executive (past or present) Alice A. Rivlin Ph.D. Person Mar 26, 2010 Advised by (past or present) Prof. Roy A. Schotland Person Sep 15, 2006 Advised by (past or present) Prof. Robert J. Shiller Person Jul 24, 2009 Advised by (past or present) John Taylor Person Apr 20, 2008 Employee/Freelancer/Contractor (past or present) Edwin M. Truman Person Jun 23, 2011 Organization Head/Leader (past or present) Paul A. Volcker Person Organization Executive (past or present) Janet L. Yellen Person Jul 29, 2013
Articles and Resources
Date Fairness.com Resource Read it at: Sep 16, 2009 Citing Risks, U.S. Seeks New Rules for Niche Banks (Back to Business)
QUOTE: While they [niche banks that give loans to business] have brought billions of dollars in deposits, thousands of jobs and millions in charitable donations to Salt Lake City, the banks have also drawn fire from Washington.
New York Times Sep 07, 2009 Mortgage Market Bound by Major U.S. Role: Classes of Borrowers Cannot Find Loans as Publicly Backed Debt Mounts (Consequences of the Crisis Part 2)
QUOTE: the government's newly dominant role... has far-reaching consequences for prospective home buyers and taxpayers. The government has the power to decide who is qualified for a loan and who is not. As a result, many borrowers among both poor and rich are frozen out of the market.
Washington Post Aug 11, 2009 Bankruptcy Judges, Justice Dept. Rip Mortgage Companies
QUOTE: Judges have found that major mortgages servicers regularly mess up basic accounting, improperly credit payments and charge unwarranted fees.
Aug 05, 2009 Despite Bailouts, Business as Usual at Goldman
QUOTE: Goldman [Sachs] executives are dismissive, even defiant, when critics argue that the bank is playing a heads-we-win, tails-you-lose game with American taxpayers. And yet the questions keep coming.
New York Times Aug 04, 2009 Dueling Public Interests In Policing Rescued Firms: SEC Actions Could Weigh on U.S. Stakes
QUOTE: the quandary [the SEC filing suit against Regions Financial] shows the difficulty facing the nation's top Wall Street cop at a time when the economic crisis has left the U.S. government as the part-owner or controller of an unprecedented array of financial companies. Protecting investors on the one hand could mean harming taxpayer-owners on the other.
Washington Post Jul 25, 2009 Economic View: An Early-Warning System, Run by the Fed
QUOTE: Now two contradictory crosscurrents are swirling in Washington — one that would enhance the Fed’s powers and one that would curtail them...turning the Fed into what some people are calling the nation’s “systemic-risk regulator"....Others contend that it has performed so poorly as a regulator that it hardly deserves more power.
New York Times Jun 20, 2009 Obama Pushes Financial Regulatory Overhaul
QUOTE: The administration’s plan would give the Federal Reserve greater supervisory authority over large financial institutions whose problems pose potential risks to the economic system. It would also expand the reach of the Federal Deposit Insurance Corporation to seize and break up troubled institutions.
New York Times Jun 11, 2009 Bank Chief Tells of U.S. Pressure to Buy Merrill Lynch
QUOTE: ... Kenneth D. Lewis, Bank of America’s embattled chief executive, walked into yet another Congressional hearing room...lawmakers turned the spotlight on personalities who were not seated in the chamber: the federal officials who had pushed him to complete a troubled merger with Merrill Lynch late last year, despite knowing that huge losses riddled the once-mighty Wall Street firm.
New York Times May 12, 2009 What Does Your Credit-Card Company Know About You?
QUOTE: credit-card companies are becoming much more interested in understanding their customers’ lives and psyches, because, the theory goes, knowing what makes cardholders tick will help firms determine who is a good bet and who should be shown the door as quickly as possible.
New York Times May 04, 2009 Should the White House Be a Place for Friends? (Bits)
QUOTE: There are some real questions about how the government will deal with the personal information it will get access to about people who befriend it online, questions that so far the White House and G.S.A. don’t have full answers to.
New York Times May 02, 2009 Fair Game: Students’ First Lesson: Beware Loans’ Fine Print
QUOTE: lenders do not disclose all fees charged in the servicing and collection of student loans, and loan contracts do not always include benefits that are promised in lender advertisements — like the possibility of a lower interest rate after graduation. Most troubling, some lenders ask students to sign promissory notes obliging them to pay off their loans before they are told what interest rate they will be charged.
New York Times Dec 24, 2008 Once Trusted Mortgage Pioneers, Now Pariahs
QUOTE: The Sandlers long viewed themselves — and were viewed by many others — as the mortgage industry’s model citizens. Now they too have been swept into the maelstrom surrounding who is to blame for the housing bust and the growing number of home foreclosures....the United States attorney’s office in San Francisco announced dual inquiries into whether World Savings engaged in predatory lending practices or misled investors about its financial well-being.
New York Times Dec 18, 2008 Credit card holders livid about 'rate-jacking'
QUOTE: [credit card companies] have this provision that says they can raise the rate -- any time, any reason," she said. In September, Maloney got the House to pass by an overwhelming margin of 200 votes the "credit card holders' bill of rights," which would have stopped rate-jacking and the imposition of other fees by banks.
CNN (Cable News Network) Dec 12, 2008 Auto Bailout Talks Collapse as Senate Deadlocks Over Wages: Without a Deal, Carmakers Face Bankruptcy Threat
QUOTE: The legislation would have provided emergency loans to General Motors and Chrysler, which have said they face imminent collapse without federal help. The high-stakes talks broke down over when the wages of union workers would be slashed to the same level as those paid to nonunion workers at U.S. plants of foreign automakers...
Washington Post Oct 24, 2008 West Is in Talks on Credit to Aid Poorer Nations
QUOTE: With the financial crisis engulfing developing countries from Latin America to Central Europe, raising the specter of market panic and even social unrest, Western officials are weighing coordinated action to try to stabilize these economies.
New York Times Oct 22, 2008 A.I.G. to Suspend Millions in Executive Payouts
QUOTE: The beleaguered insurer American International Group has agreed to suspend payments to executives from a $600 million bonus fund as well as $19 million in payments to its former chief executive, the New York attorney general announced...
New York Times Jul 22, 2008 A Housing Rescue Nears - But For Whom? Minority neighborhoods would especially benefit from a $3.9 billion aid package
QUOTE: industry analysts expect that black and Hispanic homeowners will bear the brunt of the foreclosure crisis. But is it because they overextended and should not have been in the housing market to begin with? Or were they the unsuspecting victims of predatory lending?
Christian Science Monitor Jul 21, 2008 New Regulator in Rescue Plan Spurs Debate
QUOTE: While experts on the companies agree that the proposed regulator would be stronger than the existing one, housed in the Department of Housing and Urban Development, some contend that the legislation does not go far enough. These critics say that the measure tilts in favor of the companies, even as it tries to strike a balance between promoting affordable housing — a primary mission of the government-sponsored mortgage giants — and setting limits on them to diminish the risks they pose to the world financial system.
New York Times Jul 17, 2008 Fed's Crisis Role Spurs Questions of Overreach
QUOTE: "The Federal Reserve has re-created itself," said Vincent Reinhart, a senior staffer at the Fed until last summer who is now a resident scholar at the American Enterprise Institute. "And if you do more things, you set yourself up to have to choose among them and trade off. What happens when concern for housing finance conflicts with the need to pursue price stability?"
Washington Post Jun 09, 2008 Derivatives Trading Is Scrutinized
QUOTE: One of the nation’s top central bankers called Monday for a significant overhaul in regulation of the financial industry, declaring that the current system of supervision is confusing and susceptible to “perverse” abuses. The official, Timothy Geithner, the president of the Federal Reserve Bank of New York and one of the chief architects of the Bear Stearns bailout, said banks and government regulators must take pre-emptive steps to prevent future disruptions from snowballing into crises.
New York Times
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