Bigger Banks Make Foreclosure Defense Tougher
The number of U.S. banks has fallen to its lowest number since The Great Depression, presumably at least the partial result of a stagnant economy and stiffer regulation.
According to a recent article by The Wall Street Journal’s Randy Tracy, the number of federally-backed banking institutions across the country fell to just under 6,900 in the third quarter of this year, marking the first time that figure fell below 7,000 since the mid-1930s, when the Federal Deposit Insurance Corp. began keeping track.
At its peak, there had been more than 18,000 federally insured banks in the mid-1980s. The FDIC reports that some 10,000 banks were absorbed in mergers and consolidations. Another 17 percent failed.
Just in the last three years, the total number of banks has fallen by more than 3 percent – and continues on the downward slope.
The Journal paints this development as something that might represent a positive shift for American consumers. After all, Tracy reasons, fewer banks mean greater efficiency and less trouble with oversight.
However, this view glosses over the great economic detriment we face when our banks are “Too Big to Fail.” Over the course of several decades, there has been five times the amount of wealth distributed among one-third the number of banks we used to have.
In fact, some politicians have argued exactly the opposite. One of those, Sen. Sherrod Brown (D-Ohio) noted that mega-banks are not only too big to effectively manage internally, they are too large for the government to effectively regulate.
What’s more, there has been only one new FDIC-insured bank founded since December 2010.
These are the same institutions that have gained a poor reputation for their role in the creation of the housing market collapse and the subsequent foreclosure crisis that has left millions of homeowners scrambling. Miami foreclosure defense attorneys have seen first hand the kind of brazen, underhanded tactics that banks will attempt when they know there is little that can be done to stop them – or that few will even try.
Just last month, the head of the Federal Reserve Bank of New York – one of the nation’s top Wall Street regulators – was quoted as saying that regulatory enhancements made in recent years have done little to control some of the major problems within these large banking institutions because these entities possess an “apparent lack of respect for the law, regulation and public trust.”
The regulatory boss went on to speculate that a big reason for the “deep-seated cultural and ethical failures” of big banks was directly proportionate to their size and complexity.
His comments came as the world’s biggest banks collectively faced down tens of billions of dollars in fines and settlements arising from illegal actions ranging from home mortgage fraud to interest rate and currency manipulation.
That these firms continue not only to exist but thrive amid those kind of sanctions is troubling, to say the least.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.