U.S. banks received a 27-page proposal late Thursday from state attorneys general and several federal agencies that could require them to reduce loan balances of troubled mortgage borrowers
The proposal represents the clearest indication that the 50 state attorneys general are working hand-in-hand with the Obama administration and other regulators to pursue a significantly broader settlement against the banks than any of the federal agencies might be able to win by themselves.
Some state attorneys general and federal agencies are pushing for banks to pay more than $20 billion in civil fines or to fund a comparable amount of loan modifications for distressed borrowers.
How are banks going to be able to hold saver rates stable, or ever raise them, if all the loans they have made in the past can be rewritten by the government? On top of that, the banks have to pay the government for that "opportunity." ALL of the money going to deadbeat borrowers and the government are coming out of the savers pockets. That's where the banks get the money to lend, isn't it?