A Gazette guest column published Sunday expresses outrage that big banks, some of which have been fined for violating federal regulations and mishandling mortgages, are being allowed to take a tax deduction for those fines.
“Bank of America and CitiGroup recently negotiated a settlement in a multibillion dollar lawsuit to settle charges that it mismanaged mortgages and knowingly violated regulatory practices, resulting in the wrongful foreclosure on hundreds of thousands of American families,” reads a portion of the column by Sonia Ashe of Des Moines, an advocate with the Iowa Public Interest Research Group.
“Bank of America agreed to an $11.6 billion negotiated settlement to Fannie Mae, settling charges that its Countrywide Financial subsidiary sold the agency mortgages obtained with improper underwriting and other practices. Ten banks, including Bank of America, separately agreed to pay $8.5 billion in direct and other benefits to homeowners for knowingly violating regulatory procedures and wrongfully foreclosing on hundreds of thousands of homeowners who should have been allowed to stay in their homes.
“Many have argued that the settlements levied on big banks like BOA and Citigroup were too lenient, but what really turns my stomach is that these bank giants can, and most likely will, claim these settlements as a deduction on their taxes. And when that happens, taxpayers like you and me and the homeowners that BOA wrongfully kicked out of their homes will be left to pick up the tab.
“Let that sink in for a second. That means big banks that essentially destroyed the hundreds of thousands of homeowners’ hopes, and sent the United States into an economic spiral by using illegal practices to bolster their profits, can write-off their settlement in resulting court cases as a cost of doing business.”
What do you think of that notion? Should big banks being fined for violating federal regulations and mishandling mortgages be allowed to take a tax deduction?