Huffington Post Blog by Fr. Seamus Finn, OMI “Fleeting Responsibility Abounds in 2013”
Originally published on Huffington Post Blog.
We were greeted in early January with yet another announcement about a settlement between regulators at the Office of the Comptroller of the Currency (OCC) and the Federal Reserve and 10 major U.S. banks concerning charges of abusive and faulty practices in the home foreclosure process. This time the amount was $8.5 billion. It included relief of varying amounts of money for those who were victimized in the process.
The sad story of this settlement is that it completely short circuited the foreclosure review process that was agreed upon in 2011 and in the estimation of many advocates once again left major banks and their managers off the hook. The review process in the original review process was abandoned because it was deemed too slow and onerous and not achieving the results intended by the designers of the program.
Sadly, this announcement reminds us yet again about how broken our financial system is and how government regulators have either been captured by the major institutions in the sector or simply no longer have the resources needed to carry out their supervisory responsibilities.
Is it any wonder that we are bombarded on a daily basis about the new lows to which public confidence in government agencies, elected officials and corporations has sunk? No sector of corporate enterprise seems immune from the charge. Last week, we read about company employees signing off on government mandated tests of the lithium batteries that were considered to be at the heart of the grounding of the Boeing Dreamliner.
In the parallel universe of sports where so many in our country take solace, the guardians of baseball’s Hall of Fame saw fit to exclude from the pantheon, players whose achievements tainted by the use of steroids. Lance Armstrong promised to tell all about his drug use in an interview with Oprah and Manti Te’o in a similar tell-all appearance attempted to explain his role in the virtual romance affair that was oft-repeated throughout the remarkable run of Notre Dame’s football team.
If our sports world is in such turmoil, what chance is there that we can come to a consensus about the role of government in protecting us from the rapacious and criminal behavior of some of our most storied and well-known corporations? With so much on the line, how can we expect to be able to focus on the supervision of corporations?
The lesson I took away from the recent settlement agreement was that notions like acceptance of responsibility and the obligation of restitution, especially for institutions in the financial services sector, are very quickly being consigned to the dustbin of history or at the very least being judged to be out of reach. At the same time, it appears highly improbable that we will ever again arrive at a regulatory platform in the sector that is capable of restoring and sustaining a culture of confidence and trust that is foundational to all transactions.
It is as though, even at a domestic level, legislators, regulators and corporations are operating on different levels even as we already know they are approaching the regulatory framework from differing interests. First the Dodd-Frank legislation is criticized for being too long, complicated and unclear. Next the regulators are overloaded with hundreds of rules and regulations to be written while being bombarded with pages of input and contradictory comments. Finally, the corporations when asked to come up with proposals that would establish the foundation for safety, soundness and confidence-building going forward, are hesitant, lest they find themselves victimized later on by their own recommendations.
The results of the numerous autopsies concerning the circumstances and decisions that allowed the near financial meltdown of September, 2008 to emerge are continuing to be examined. The evaluations, critiques and analyses of the decisions, policies, programs and remedies that were made to halt the crisis and respond to its consequences are ongoing. More stimulus, more austerity, more transparency fewer regulations and ring-fencing to prevent too big-to-fail catastrophes; take your pick.
Somehow in the midst of this ongoing quagmire of debate, proposals and postponement or as it is commonly known “kicking the can down the road,” countries, governments and the private sector must redouble their efforts to respond to the innumerable nameless victims whose lives have been literally destroyed by the near meltdown of the system. The millions who have lost their homes in the aftermath have not disappeared. The parents and children who were scarred by the experience of abandoning their homes, neighbors’ friends, local schools, churches and communities continue to search for a climate of stability where their they can regroup and find communities and institutions that offer both solidarity and security.