Sheila Bair's whodunit

I am not a CEO of a major bank. I am not now, nor have I ever been, a member of an organization willing to overturn the economy for my own financial gain. Unfortunately, not everyone can make that claim.

In the news this week, United States attorneys have filed criminal charges against local Sacramentans allegedly involved in mortgage fraud totaling $16 million. At the same time, United States attorneys have announced settlements with HSBC bank and Standard Chartered Bank in probes investigating billions of dollars of money laundering for the Mexican drug cartels and Iran. That’s right, there are criminal charges in the case involving millions of dollars, and settlements in the cases involving billions of dollars.

It was against this background that I read former Federal Deposit Insurance Corp. Chairwoman Sheila Bair’s recent book. In her gripping whodunit, Bull by the Horns, she gives a blow-by-blow history of what happened during the 2008 financial meltdown. Bair convincingly tells how the free marketers allowed the banks to do whatever they wanted, including but not limited to lying to regulators, paying off auditors, granting themselves unwarranted and unjustified bonuses—all in all, a story of incredible mismanagement and arrogance beyond comprehension. In the end, the American taxpayer was left footing the bill.

As Bair tells it, because her fellow government officials believed that the banks were “too big to fail,” they felt that there was no way to punish them without destroying the economy. So both the Bush and the Obama administrations have allowed bank officials to get away with deeds that would put average citizens in jail. You or I could be incarcerated for writing a bad check for several hundred dollars, but these banks accused of money laundering are getting settlements.

The subtitle of Bair’s book is Fighting to Save Main Street From Wall Street and Wall Street From Itself. The FDIC was one of the few agencies advocating for a fair deal for the American taxpayer. Bair and the FDIC repeatedly pushed to punish bank officials, if not with jail, then at least with the loss of their jobs. In her book, Bair talks proudly about her fellow FDIC employees.

I do not know Bair personally, but I do know Linda Ortega, who recently took the position of FDIC’s community-affairs officer for the Western states. She introduced me to the FDIC’s financial-education programs. Its Money Smart program explains the ins and outs of checking accounts, credit cards, home financing and much more. I found that the best time to reach Linda was to call the San Francisco office an hour or two before it officially opened, because she would already be there. She and the other FDIC employees that I have worked with take their job seriously. The FDIC is America’s first responder in this battle “to save Main Street from Wall Street and Wall Street from itself,” and we’re lucky to have it on our team.