Bank Lawyer's Blog

When In Doubt, Threaten The Bank

These days, saying you're a "banker" is, in the minds of many members of the general public, like saying you work for a Middle Eastern charitable organization named "Al Keyeda."  Unable to distinguish between TBTF bad boys and the thousands of smaller banks that not only weren't involved in creating the current depressed mess in which we wallow, but are as much victims as are any of the rest of us, Joe Sixpack is only too willing to pee on a banker's geraniums or hock a loogie into his cup of joe if given an opportunity to do so. Community bankers have come to expect such ignorant hostility as going with the territory. However, it's especially painful when a desperate and cranially-deficient member of the public decides to make bankers' lives miserable not so much out of misplaced sense of aggrievement, but as part of a loopy plan to prevent the bank from doing the right thing.

A Connecticut woman who hid unemployment and money troubles from her husband for nearly a year phoned in bomb threats to banks and an insurance company to prevent him from asking questions, police said. She was arrested when an officer recognized her from a surveillance video he viewed while tracking one of the threats.

The officer may have recognized her because she's the wife a fellow police officer.

Coventry Police Detective Michael Hicks said Thursday that he recognized McLean and her sport utility vehicle from a liquor store's surveillance video, which he viewed after discovering that one of the threatening calls was made from the shop.

I suppose downing a quart of MD 20/20 makes phoning in bomb threats a little easier on the nervous system.

The befuddled woman had hidden from her husband the fact that she'd lost her job and was not paying the family's bills for over a year. I expect that she's either an expert dissembler or hubby has the deductive powers of Inspector Clouseau.

The husband was headed to the couple's bank, apparently to check into the financial records that the wife had falsified or concealed, and the wife thought she could thwart the bank's ability to reveal all to the husband by repeatedly phoning in, and sending written, bomb threats to various branch offices of the bank. Offices were evacuated, police dogs sniffed for bombs, and a good time was had by all. I'm not sure how long she thought she could keep up the charade, but she's now sitting in the slammer in lieu of $45,000 bail. I guess she could call in a bomb threat as part of a plot to extort bail money out of the bank, but by now, I think that scam has worn thin.

You can't make this stuff up.

You, Fat Man: Speak up!

At the end of the Oscar-winning film Unforgiven, Clint Eastwood's character, William Munny, walks into a house of ill repute that is loaded with men organizing a posse to hunt him down and kill him, and, pointing a double-barrelled shotgun at the assembly, asks a simple question. When he receives no immediate answer, he turns to a deputy sheriff the size of the average NFL offensive lineman and suggests "You, fat man: speak up." The fat man doesn't speak up, a gun fight ensues, and it ends badly for many of the spectators, including the fat man. It's unlikely that it would have ended substantially differently even if the fat man had spoken up, but you just never know.

I thought of Munny's request recently when discussing with a peer some of the lessons I've gleaned from my representation of directors of distressed banks and thrifts, some of which have failed and some of which are hanging on by the skin of their teeth. One of the many lessons is this: directors who have questions or concerns about management's conduct, plans, or recommendations need to speak up.

Some directors might be intimidated by senior management personnel, especially chief executive officers, or other board members, who have more experience in banking operations. Other directors might have a bent to "go along to get along," or have a personality that abhors direct confrontation, or who simply feel insecure about being made to look foolish in front of their compadres on the board of directors by asking "stupid" questions or raising "stupid" concerns. A few New Age directors might be concerned that interpersonal conflict among board members or between the board and management might cause blockages to occur in their personal aura that will require advanced Reiki therapy to unblock. Whatever the reason for remaining silent, I point directors to this passage from the FDIC's "Pocket Guide for Directors":

The first step both the board and individual directors should take is to establish and maintain the board’s independence. Effective corporate governance requires a high level of cooperation between an institution’s board and its management. Nevertheless, a director’s duty to oversee the conduct of the institution’s business necessitates that each director exercise independent judgment in evaluating management’s actions and competence. Critical evaluation of issues before the board is essential. Directors who routinely approve management decisions without exercising their own informed judgment are not adequately serving their institutions, their stockholders, or their communities.

No director now sweating bullets because his or her bank failed or is in danger of failing ever thought things would turn out the way they have. If he or she had, they would have not only spoken up more at board and committee meetings, asked more questions, and made more of a pest out of themselves, they would have made certain that their "speaking up" was accurately reflected in the minutes of the meetings at which they "spoke up." That's not the only protective measure a director needs to take to make sure that his or her independence is adequately reflected in corporate records that one day may be severely scrutinized by a receiver looking for deep pockets into which to stick its mitts, but it's a start.

What the rotund deputy in Unforgiven should have done was to hastily point out the owner and when Munny turned away, to dive headfirst out the nearest window (or, as big as he was, simply run through the nearest clapboard wall). He could have saved himself the pain of being shot down like a dog in the street. You see, when the bullets start flying, it's every man for himself, and it's best to understand that fact long before the pistols are unholstered.

Durbin Amendment Consequences Coda

Writing today at Forbes.com, Ilana Greene gives us more good news about the after-shocks emanating from the Durbin Amendment's slicing and dicing of debit card interchange fees:

• "Customers banking at certain institutions, SunTrust and Regions, for example, have been forewarned of a monthly fee that will be levied upon anyone who uses their debit card at the point of sale to make purchases, whether the transaction is processed as “debit” or “credit,” much to the chagrin of customers."
• "As far as merchants go, things look somewhat grim; especially in light of announcements made by both Visa and MasterCard that they will increase their credit cards processing rates to historic highs starting October."

According to one consultant, who was being diplomatic, whether by intent or not, the Durbin Amendment has benefited one small group of

According to Robert Livingstone, president and founder of consulting firm IdealCost.com, “The Durbin Amendment touted itself as the end-all of all unreasonable merchant fees. Whether it was poorly drafted to purposely support only certain industries or miswritten completely by accident, it will result in harming American merchants,” marketwatch.com reported him having said.

Did anyone really think Visa and MasterCard were going sit on their keisters and drool while their income from debit card transactions was being beaten down? Is it any surprise that they are raising credit card processing fees to make up for the income they're losing on debit cards? Is anyone surprised that some banks are charging a fee if customers use a debit card?

If anyone answered yes to any of the previous three questions, open the plam on your dominant hand and slap yourself silly.

Dodd-Frank: a gift that just keeps on giving. Unfortunately, what's it giving is pain.

A Double-Bonus Of Unintended Consequences, Courtesy Of Dick Durbin

When former FDIC Chairman Bill Isaac called the Durbin Amendment "pure and simple, special-interest politics," he obviously meant that Dick Durbin was a tool of big-box retailers, which are the businesses that benefit from cutting debit card interchange fees in half. It's "price control" in its most naked form, and the retailers who receive the price cut claim it will benefit customers by reducing costs of each transaction. If you believe that retailers will pass along the reduced costs to consumers in the form of lower prices rather than keep the savings for themselves, I guarantee you that for a very reasonable price, I can get you a date with Sophia Vergara. Just send me $500.00 in unmarked twenty-dollar bills and trust me. Hey, would I lie to you?

Lining the pockets of the those who line the political committee coffers of pols is a time-honored tradition in this country, yet it's not the most odious aspect of this piece of federal legislative sausage. Legislation like the Durbin Amendment (as well as the remaining 2300 pages of that steaming heap of bat guano popularly known as "Frank's Folly") has all kinds of unintended consequences (as opposed to the intended consequence of increasing retailer profits). One of those unintended consequences is inconveniencing consumers, as consumers in Houston, Texas, and elsewhere will discover in the near future.

International Bancshares Corp. this week said it plans to close 17 grocery store branches in the Houston area by the end of the year.

The branches are among 55 branches the Laredo-based bank holding company will shutter. IBC cited new bank regulations limiting how much banks can charge for stores for debit card transactions as the reason for the closings.

The bank operates most of its Houston-area branches in H-E-B and Kroger stores, according to its website.

“Our customers have always made it clear to us that free products and services are extremely important to them,” Dennis Nixon, IBC chairman and CEO, said in a statement. “To keep those free offerings in place, we will have to reduce expenses. This means we will close 55 of our smaller in store branches located in grocery stores.”

IBC (Nasdaq: IBOC) expects the move to affect about 500 permanent jobs over the next 90 days.

So, as an added bonus unintended consequence to customer inconvenience, 500 bank employees will hit the streets to find new jobs as IBC reduces expenses to match reductions in fee income. This little vignette is just one example of many similar consequences that are unfolding, and will continue to unfold, all over the country.

The post-Dodd-Frank world that's looming on the horizon is starting to resemble the world created by Cormac McCarthy in The Road. For those of you who haven't read the book or seen the movie, that is not a good thing.

 

Bringing In The Pros From Dover

The pros from Dover is an American slang term for outside consultants who are brought into a business to troubleshoot and solve problems. The term comes from the 1968 book M*A*S*H by Richard Hooker. --The Phrase Finder

According to an article in today's SNL News (no link provided; you need to be a subscriber to read it) former Texas Savings and Mortgage Lending Commissioner Danny Payne thinks he may have spotted a trend: community and regional banks taking a cue from their bigger brethren and filling board seats with former regulators and experienced senior bankers. [Disclosure: Danny and Terry Stroud, also quoted in the linked article, are personal friends of this blog's bloviator. That fact should not be held against them.]

Shareholders of Coronado, Calif.-based Coronado First Bank recently approved a merger with San Diego-based Embarcadero Bank and also recommended four people, including Payne, to serve on the new bank's board.

Banks that have traditionally sought successful community business or civic leaders for their boards are now turning more to experienced bankers or even former regulators, industry observers say, as bank regulatory agencies call for stronger board oversight.

"This provides more in-depth experience, industry knowledge, management oversight, resources for management and in some cases it provides for interim senior management during the executive search by someone who is highly knowledgeable of the bank," Payne said.

[...]

With the large number of retired bankers and regulators available, Payne is urging banks to consider bringing them on board. He said a multitude of regulatory enforcement orders have been issued during the past three years calling for added board oversight with more direct involvement in the bank's affairs. More focus and attention is now being given to new board structures to include candidates with financial industry experience.

In addition, "What has also evolved is the desire of most major bank capital contributors to focus more on board makeup in addition to deriving comfort with a management team when conducting their investment analyses," he said.

Former OCC and OTS regulator Terry Stroud also points out that many community bank directors have never seen distressed times like these nor "experienced the regulatory scrutiny going on in the current environment." Both Payne and Stroud think regulators will welcome the addition of such board members, who bring a skill set that should be useful to the other bank board members and senior management in challenging times like these and, equally as valuable, a credibility with the regulators that you can't replicate unless you've "been-there-done-that."

Because I'm such a silver-lining-kind-of-guy, I won't spend much time discussing the flip side of this trend (if it is, in fact, a trend): To whom much has been given, much will be required. In other words, because such board members possess more specific expertise on regulatory matters than the average real estate broker, dentist, or civic leader who might occupy a seat at the board table, there's a good chance that they will be held to a higher standard of "business judgment" when it comes to compliance with regulations and statements of policy. That won't scare off many prospective candidates, but, nevertheless, it's always a good idea to enter the arena with your eyes wide open.

FHFA To Issa: It's No Big Deal

Responding to charges that Bank of America's sale of servicing rights to Fannie Mae was some kind of "back door bailout" of BofA (as writer Francine McKenna charged at Forbes.com last month and as Congressman Darrel Issa reiterated last week), Edward DeMarco, the acting head of Fannie Mae's overseer, the Federal Housing Financing Agency, publicly defended the deal in a recent speech.

"We are certainly concerned about ensuring that these higher risk mortgages are adequately and appropriately serviced, and this was an arrangement that helped to realize that goal," Edward DeMarco, acting director of the Federal Housing Finance Agency, said after remarks at a mortgage conference sponsored by the N.C. Bankers Association.

So, Bank of America was not capable of "adequately and appropriately" servicing the loans? According to BofA, the ultimate buyer of those servicing rights from Fannie Mae (Fannie Mae doesn't service loans itself) is an entity with "loss exposure" on the loans. Is the argument being made that the originator of the crappy loans that are being serviced by BofA (since that entity has the "loss exposure," I assume it originated the loans) is going to be better at collecting those crappy loans than America's biggest bank? That defense is hardly "robust."

The suspicion voiced by McKenna and Issa is that the $500 million Fannie paid for those servicing rights might be more than "market," or that the decision to purchase the servicing rights wasn't motivated by anything other than the fact that BofA needed the cash so that it could, among other things, spend it on loan repurchase requests of Fannie Mae and Freddie Mac and to settle litigation recently brought by the FHFA against BofA and 16 other banks over the lousy loans those banks sold to the GSEs. DeMarco's statement does nothing to allay those suspicions.

BofA was a little more "on point" with its response to the critics.

Bank of America spokesman Dan Frahm said the bank periodically sells mortgage-servicing rights or transfers mortgage-related assets to third parties. "This is a commonly accepted, industry-wide practice that many mortgage loan servicers, including Bank of America, have engaged in for many years," he said.

Just business as usual, according to BofA. Nothing to see here. Move along.

You believe that, don't you?

Yeah, that's what I thought. I don't think Rep. Issa's backing off his inquiry, either.

Getting Where You're Going

I don't customarily use guest posts on this blog. In fact, I generally ignore the requests I receive to guest post here, since the overwhelming majority of such requests are from people trying to sell you something. However, I'm making an exception for former client and current friend Pat Dalrymple (who's also a blogger and who I've mentioned previously) because he's not trying to sell you anything, he just wanted to "vent," and there's nothing I like better than a good "venting." The following opinions are solely those of Pat, and I neither endorse nor disavow them. They just make me chuckle because, as a former US president once proclaimed, "I feel your pain."

HE WHO DOESN’T CHANGE COURSE WILL GET WHERE HE IS GOING

(Said to be a Chinese proverb)

By

Pat Dalrymple

There are a slew of community banks walking the road to extinction that are refusing to even consult a map, let alone considering making a right turn to avoid oblivion.

Their condition is compounded more by paralysis and denial than by confusion.  Many haven’t crawled out of the potentially fatal image of a community bank to even dither over survival options.

Before speaking further, I’d better make a few things clear:

I’m not very smart; if I were, the bank that I helped charter in 1990 and ran for 16 years wouldn’t have been compelled to sell for virtually nothing in 2008, after being hit with loan repurchases from secondary market investors (most of which aren’t around anymore, if that’s any satisfaction).  But I’ve been around banking since 1961, and I’ve seen things done very well, and very badly.  Because of my own recent experience, I’ve been both empathetic and, frankly, appalled by what I’ve seen in the last three years in my consulting business, which has targeted troubled community banks.

And I am smart enough to know that, if you’re heading east and don’t want to go there, you’d better go west fast.

I’ve noted that the malady suffered by small problem banks, from, say, $75,000,000 up to $1,000,000,000 in assets, is a form of paralysis.  Below are the causes and symptoms of the illness- and maybe even the treatment:

• Management and the board of directors say, “If we can just hang on until we get rid of our problem assets, we’ll be fine”.  No, they won’t.  Few troubled banks in this asset range are making money operationally, and virtually none have a viable business plan for profitability in the radically changed banking industry.  They believe that they can go back to making the kind of loans they made before the roof fell in.  These are the loans that got them into trouble in the first place.  Economic conditions preclude making these loans, the regulators won’t permit it, and the potential customers don’t qualify anyway.

• “Whatever we do, we have to preserve the franchise value of the bank”.  Today, the bank in a troubled state has no franchise value, and may never, under any circumstances, have much of a franchise vale if it can’t find a business model that can turn a profit.  Recently, I heard a CEO say, “Yeah, we’d like to sell, but we’re not going to give the bank away”.  He’s right as rain; nobody would want it.

• “I can sell a branch (or branches), shrink so I’ve got a well-capitalized core ratio, and make some money at the same time”.  Probably not; branches finally being perceived as what they’ve always been:  anchors encased in concrete that have an annoying tendency to drag the ship down.  They have to be very well located, and have the potential to generate profit, not just deposits.  Besides, those that want to expand can readily do so for virtually nothing by just cutting a deal with the FDIC on a shuttered institution.

• “We may have problem assets, but we’ve got a great management team, and loyal employees”.  Maybe: but it’s a management team that can’t move its arms or legs, a group that’s looking over its shoulder at the regulators, and isn’t managing to do much of anything, including making money.  The worth of a business’ human assets are in direct proportion to their ability to generate profit.

• “We don’t want to gut the bank, and upset our customer base by laying off people” (See “franchise value”, above}  Take a look at the quarterly financials of troubled banks on the FDIC website. Most of them haven’t reduced their employee count.  Many have increased the number of people.  The latter is often a result of regulators mandating a new positions, such as credit officers or compliance managers.  Banks have no choice but to acquiesce to this.  But they often are bound by inertia when they have discretion in reducing staff.  One reason is the feared community reaction.  It’s never as bad as expected, and news stories about the suits coming in on Friday night aren't exactly the best press either.

• “We’ve put our loan people to work managing problem assets”.  This is an oldie but goodie.  This mantra has been around long enough for the dismal results to become apparent.  Ask practically any CEO of a troubled institution, as Dr. Phil would, “How’s that workin’ for ya?”  and the reply invariably is, “Not very well”.  You end up with a lousy asset manager, and a terrible loan officer, especially if they’re trying to do both.

There is no cure for the Bad Asset Virus.  If it’s serious enough, it’s terminal, and about all that can be done is make the last corporate days of the bank, its employees and stockholders, as comfortable as possible.  However, if the case is merely serious and not terminal, there are treatments that can help mitigate the condition.

• First thing: make money.  Oh sure, easier said than done.  But, consider:  if management can’t figure out how to do it, the bank is done anyway.  The route to a profitable business model won’t be found by thinking in the customary community bank frame of reference.  Being what you were won’t make you what you want to be, and being what you were is why you’re where you are, so….

• Explore ways to use the bank platform to bring in revenue quickly, with a minimum of risk. One example:  there’s no business operation or financial entity that’s better positioned than most community banks to produce residential real estate loans in their market area.  Borrowers think of their bank first when seeking a home loan, and banks can originate the deals and pass them on to the secondary market.  If the loans are table funded, or directly funded by the end lender, there’s virtually no risk of repurchase. But banks are failing miserably to grab this opportunity, which can generate an impressive new revenue stream in a short time.  Many feel that not closing in the bank’s name will make them (whisper, and spell out the words) a m-o-r-t-g-a-g-e  b-r-o-k-e-r.  I assure you, Mr. or Ms. Community Banker, your customers don’t really care where their money comes from, they’re not immediately going to transfer their allegiance to Wells Fargo, and, yes, they will respect you in the morning.

• Seriously, really seriously, consider cutting personnel costs.  Don’t get high on your own supply by recycling amongst board and management the same canned routine that’s provided for the examiners' consumption. Don’t succumb to the temptation to keep people because you’ll need them “when things turn around”.  If your bank is still around  when things turn around, it won’t be the same bank. One way to do this is to….

• Eliminate branches.  Put them on the market, and if they languish with no takers, as they likely will, then close them down.  Recent studies have concluded that the cost benefit of maintaining expensive facilities and personnel to serve the least profitable customers, which are generally those who use branch facilities, simply doesn’t make sense.  Increasingly, the value of a branch network is being judged by its ability to produce revenue at a reasonable cost, and not just on its liability generation.  In banking, the easiest side of the the balance sheet to satisfy is the liability side.  Putting on good assets is the hard part.

• If the bank’s management team is seriously challenged to solve the profit generation problem, it can be surprising what can happen.  People continually shock themselves and others with their creativity.  But the impetus won’t come from the management group; it has to be external.  Community bank executives aren’t conditioned to suggest radical changes to boards and stockholders, because they feel that a radical course change smacks of blasphemy, especially in the community bank culture.  Regulators can, and do, scare the be-jesus out of everybody, but they can’t light this particular fire.  Somebody, maybe a maverick director, or perceptive chairman has to say, “Folks, we’ve got to change our direction, or we’ll surely get where we’re headed.  Put your heads together and come up with new business model options.  The bank’s survival, the investment of the stockholders (who may be friends and neighbors) and your jobs depend on it”.

• And finally don’t fear changing the makeup of the board, and replacing top management.  No CEO ever said to the board, “What we did was wrong, what we’re doing is wrong”.  Human nature almost surely precludes this.  A new team may be the only answer.

As I said, I’m not the brightest light in the chandelier, but I’ve done some things right, and some wrong.  And, finally, after half a century, I do have the wisdom to know the difference: one of the marketing blurbs for my consulting operation is=

“Hire the guy who’s made the mistakes.  He won’t make ‘em again”.

If You Can't Join Them, Beat Them

The Washington Post recently ran a story about the law firm of Quinn Emanuel Urquhart & Sullivan, which decided, before the current financial crisis hit, that the competition they faced for the work of banks was too stiff.  They decided to make their money by suing banks, and the bigger the bank, the better they liked it. As a result of the hot water many of the nation's biggest banks find themselves in these days, the law firm's busier than a one-armed paper hanger.

This month, Quinn Emanuel filed more than a dozen of the 17 lawsuits that federal regulators brought against foreign and domestic banks, claiming they had sold nearly $200 billion in fraudulent mortgage investments to housing giants Fannie Mae and Freddie Mac.

The fact that Quinn Emanuel represents giants like Fannie and Freddie indicates that it has definitely barked up the right tree. The US taxpayer is ultimately footing those legal fees and with the phalanxes of trial lawyers that the defendants can employ to slash and burn the legal landscape and prolong the agony for both sides, billable hours will be flying as fast as one of those Riverdance cloggers in "full-tilt-boogy" mode. I feel for the legions of paralegals and first-year associates, armed with bates stamps, toiling away in conference rooms and less savory venues at their Sisyphean task of numbering every piece of paper ever produced by the dead trees of northwest Oregon. On the other hand, in this world we like to call "Litigation Land," there are field hands and there are overlords, and you've got to toil in the fields for years before you get a chance to lunch in the Big House.

And it's not just the plaintiffs' law firms that will benefit. No, big bank defendants will be shelling out mucho dinero to their law firms, as well.

Lawyers for plaintiffs and defendants alike are benefiting from the increasingly litigious fights between investors and Wall Street firms over the shoddy mortgage-backed securities that fueled the housing boom and exacerbated the bust that followed.

At this point, no one knows how many villas in the south of France will be funded with the fees generated by all of this litigation. On the other hand, no one expects that the ultimate amounts spent on lawyers will be small.

It’s unclear how much the outside firms working on the FHFA suits stand to make from the cases and how much taxpayers will be charged for the work. The FHFA declined to comment for this article, and lawyers at Quinn Emanuel declined to discuss particulars of their work with the government.

What is certain is that Fannie and Freddie have made a lot of money for many lawyers since the government seized the mortgage giants three years ago to prevent them from failing. As of earlier this year, the two mortgage finance companies had spent $160 million to defend themselves and their former executives in lawsuits and $50 million on foreclosure lawyers now under investigation in Florida.

Sure, you could be depressed about how, three years after Aunt Fannie and Uncle Freddie had to be "put in a home," those two black holes of taxpayer losses continue to emit the giant sucking sound that Ross Perot once ascribed to NAFTA, but you have to look on the bright side of this disaster: trial lawyers are making a bundle no matter who foots the tab.

Bill Isaac Unloads On Dodd-Frank and Dick Durbin

Former FDIC Chairman (and current Chairman of Fifth Third Bancorp.) Bill Isaac gave a no-holds-barred interview to Infosecurity.com's Tracy Kitten last week, in which he had some harsh words for Dodd-Frank in general and the Durbin Amendment in particular. Among the high points to me were the following:

• We could very well be on the verge of a double-dip recession "because we just have a dearth of political leadership in this country right now...We've lost confidence and the government is doing nothing to restore it."

• The Durbin Amendment is "pure and simple, special-interest politics."

"I think the Durbin amendment is really a terrible precedent," Isaac says. "It weakens the banking industry at a time when we need it strong, and the folks who supported the Durbin amendment should be ashamed of themselves."

• "I'm really quite concerned about our community banks. The community banks, I think there are some 7,000 right now, that are below a billion dollars in size. They are quite threatened because of this, mainly because of the Dodd Frank Act. The regulatory requirement has just made life miserable for the smaller banks. The regulatory burdens of hundreds of new regulations that are going to be thousands and thousands of pages long, it's just overwhelming for a community bank to try to comply with all of that."
• "One of the major flaws in Dodd Frank from the community bank perspective is that it eliminated trust deferred as a source of capital...That was not well-thought at all, and I think that counts and ought to be repealed for the small banks."
• "I believe Dodd Frank is the worst piece of financial legislation in history, but I'm afraid I can't go back to a thousand years. I'm old, but not that old. I can't say in history. I can say it's the worst piece of financial legislation in modern history."

There's much more there, and I'd encourage community bankers to read it all. Even if you don't agree with everything Bill has to say, I've always respected the fact that he's one of those people who tells it to you as he honestly sees it. Like former Kansas City Federal Resrve Bank chief  Thomas Hoenig and current Dallas FRB chief Richard Fisher (someone who can occasionally be as wrong as rain), you have the feeling that the man doesn't worry about whose backside might be chapped by something he says, which at the top of the food chain in a heavily-regulated and often heavily-politicized business like banking, is a rare trait.

Odd(ball)s And Ends

After reading last night's post about the ruling in a whitleblower case by the Department of Labor against Bank of America, a former insider sent me a link to a story from the Center for Public Integrity that gives more details about the case, including the fact that the fired employee was no ordinary whistleblower. No, she was the "executive vice president in charge of fraud risk management." In other words, according to the findings of the DOL, she was fired for doing her job.

As I said yesterday, the bank denies the allegations. In addition, the linked article above confirms my expectation that BofA will appeal the decision.We haven't heard the last of this one.

While discomfited by the possibility that all might not be entirely on the up-and-up at America's Bank, I was soon feeling much better when I learned that that the US justice system isn't letting those lawless  Amish anarchists continue to flaunt the statutes of a land I like to call "The Land of the Free."

Eight members of a traditional Amish sect were behind bars on Tuesday after refusing to pay fines for failure to display orange-red safety triangles on their horse-drawn buggies.

The eight were being held in the Graves County Jail, serving sentences ranging between three and 10 days for failing to pay the fines on religious grounds.

Graves District Judge Deborah Hawkins ordered the men jailed Monday in Mayfield, about 200 miles from Louisville in western Kentucky. The defendants contend that paying the fines would amount to complying with a law that violates their religious restrictions against wearing or displaying bright colors or relying upon man-made symbols for their safety.

We've been all over these renegade "Pennsylvania Dutchmen" before. First it's raw milk, now no triangles on the buggies. What's next: dusting a public building with a feather duster? Milking another farmer's cow? Possessing a "realistic" dildo? I mean, it won't be long before one of these guys rushes into a courthouse strapped with C-4, yells "Thine unjust ordinances cause much consternation," and blows everyone to kingdom come (and beyond). We wouldn't cotton to that type of behavior in the Lone Star State, and I'm pleased to see that the Keystone (Kentucky) Cops won't either.

All of which leads me without any rhyme or reason to the bizarre tale of actor Nicolas Cage, who relates that one night he awoke to find a man naked, except for Cage's leather jacket, standing in front of his bed eating a Fudgesicle. It's not the incident itself that I find bizarre, since Cage long ago proved that weirdness is his normality. No, it's the fact that Reuters felt the need to add the following sentence to the story.

A Fudgesicle is a frozen, ice cream-like snack.

Thank you, Reuters. That kind of drill-down is why the main stream media is still proving its worth to me, hour by hour, day by day.

May you all have a safe, Fudgesicle-free weekend.