Most states have laws on their books that make it illegal to spread statements about a bank in order to undermine confidence in the bank.
They do this for the very good reason that when a run on a bank starts through rumor or innuendo and the bank goes belly up- and it happens very quickly- it costs taxpayers money, it costs shareholders money and it costs society as a whole.
The rule, in other words, is to be very careful about what you say about banks. Banks live by these rules and so do regulators. In fact, when a bank is in trouble with regulators, the information is considered confidential and not to be disseminated to the public.
Here’s the relevant code from New York:
§ 671. False statements or rumors as to banking institutions. Any person who wilfully and knowingly makes, circulates or transmits to another or others any statement or rumor, written, printed or by word of mouth, which is untrue in fact and is directly or by inference derogatory to the financial condition or effects the solvency or financial standing of any bank, private banker, savings bank, banking association, building and loan association or trust company doing business in this state, or who knowingly counsels, aids, procures of induces another to start, transmit or circulate any such statement or rumor, is guilty of a misdemeanor.
Really, it’s in our best interest to foster confidence in our banking system rather than the opposite. The whole banking system rests on people’s confidence in it: banks have confidence debtors will pay; debtors have confidence that they’ll be able to pay and depositors have confidence that the bank will be able to pay. Confidence is why laws like trying to adversely effect the solvency or financial standing of any bank are on the books to begin with.
And that’s why it was doubly startling to see US Senator Dick Durbin (D-Walgreens) frothing with hysteria while trying to kill a major US bank- a bank that presents a systemic risk for our entire banking system- from the floor of the US Senate.
And the crime that bank committed?
It wasn’t mortgage fraud, or loan discrimination or accounting irregularities.
Nope. It was a $5 per month debit card fee that Democrat legislation created.
Durbin pitched his amendment, which empowered federal bureaucrats to fix the fees banks can charge merchants for each debit card transaction at 24 cents, as a blow to the "excess profits" of "big banks." Banks currently charge an average of just 44 cents per transaction, but for big retailers like Wal-Mart, all those transactions can add up. Analysts estimate that the Durbin amendment will be a $6.6 billion boon for the Targets and Walgreens of the world.
Glad to know the Democrats draw the line somewhere...and successfully connect the dots to average consumers.
Overload on sub-prime mortgages and you qualify for a federal bailout. But disagree with a nonsensical “bank reform” regulation passed by Senator Dick Durbin and we’ll put you out of business.
Hey Dumb-A** Dick: Everyone told you this is what would happen if you passed that dumb-a** law. Not content to pass laws that have adverse consequences for the economy, they have to blame someone else for their sloppy legislation.
This, folks, is where all the jobs have gone in the country.
They exist in the netherworld created by Democrats between government hysteria and government extortion. And the jobs won’t be coming back until grown ups are in charge of the country again.
On the one extreme, you have a handful of communists rallying against capitalism to the applause of the left-wing media and their cohorts in the vast left-wing conspiracy; and on the other extreme, you have US legislators trying to put banks out of business while whining that banks aren’t loaning money.
The extreme is all that’s left of the Democrat Party. They are all now a part of the Hope-and-Change wing of the new Democrat mobocracy.
Not only do they root for failure, but they have become a giant Ways-and-Means committee of government failure by design.
Democrat strategist James Carville recommended that Obama indict someone over something- anything- in order to restore confidence in his administration.
He can start with Dick Durbin.
Throwing in Eric Holder and Elena Kagan wouldn't hurt either.
Because, until they’re gone, the jobs, the economy and sanity are gone too.