Today for lunch, I met with the executive director of a local legal aid organization and the director of the local Industrial Areas Foundation group. They have been organizing for quite some time to get banks to renegotiate. They are also trying to get money for a pilot project to get banks to write down some principal if the borrower can get a soft second.
So they went to the Treasury Department to try to sell Treasury officials on the plan. They met with one very high-ranking member of the Department, who asked them whether the banks were in on it. When they replied that they had gotten tentative commitments from B of A, and Chase, and asked whether the government would be able to get the money to support such a program nationwide, the official replied,
“If B of A and Chase come in here and say that we should do this, then we’ll find the money.”
I asked them to repeat that, to make sure I heard it right. Yes, you heard it right, they said. The Treasury didn’t want to know whether the program worked — just whether B of A and Chase wanted it.
The Treasury is now officially a wholly-owned subsidiary of the big banks. We knew that already, but I have rarely heard it stated so baldly.