Bank Lawyer's Blog

She's Baaaaaack!!!!

In the aftermath of last month's stalemate at the polls, I pointed out one perverse bright spot: Lizzie Warren would be a member of the US Senate and, therefore, potential blog fodder. The announcement that she's achieved her deepest longing, and been appointed to the Banking Committee, not only sent  left-wing mouthpieces like David Lazerus into orgasmic ecstasy, they've guaranteed me at least four years of unrestrained whack-a-mole bliss. As one reader emailed me, the bankers thought they'd killed her off, but she's risen from the dead to eat their eyeballs and has, thus, become: "Zombie Lizzie." So, you see, "it's all good."

Speaking of "all good," I suppose most of you have seen by now the video of the Oklahoma bank employees who were "rewarded" by management for good behavior by being permitted to make a Gangnam Style music video. For those of you who've not yet seen it, here it is:

To me, this demonstrates conclusively that when you live in the buckle of the bible belt, you simply cannot "get jiggy with it" in convincing fashion. My props to the peeps for the effort, though.

Of course, it's tough for any bankers to compete with the Gangnam Styler-In-Chief.

More Mailbagging

A few recent emails are worth a comment (or three).

1.    A credit union trade official wrote to comment on my recent spate of blog posts regarding news reports about the brutally different results for robbers who pick on credit unions versus robbers who pick on banks. The latter are apt to be apprehended with their persons intact, while the former are apt to meet their maker, then meet his evil twin "Skippy" (aka "The Dark Price"). My correspondent intimated that I might be leaning toward the bankers on this matter, due to some sort of suppressed pacifist tendency that, if not nipped in the bud, might flower into a marijuana brownie-munching, Birkenstock-wearing meltdown. He thought I might soon be shouting "When guns are outlawed, only credit unions will have guns!"

Rest assured: I will never wear Birkenstocks.

2.    Last night's ramble regarding IndyMac officers who did not "beat the rap" prompted one financial institution attorney to wonder when the defendants would demand indemnification from New York Senator Charles "Chuckles" Schumer, and then answer his own question with "Oh wait, I forgot he doesn't have to answer for his actions . . ." A man after my own heart.

Long-time readers may recall my many potshots at that cretin esteemed member of the US Senate when his election year electioneering precipitated the run on IndyMac that forced the OTS to close it. Not that the OTS would not have had to close the steaming heap of goat custards that comprised IndyMac eventually, but that agency and the FDIC might have made a more orderly transition to oblivion than the lines-around-the-block debacle that Schumer's "leakage" precipitated. I reminded my correspondent that my original lambasting of Chuckie Cheese earned me a-whole-lotta-hate from leftards and moonbats, including one prominent, New Yawk City-based, bank-hating blogger who just about had to invent an entirely new language in order to articulate epithets vile enough to accurately describe my bovine nature. Man, that was a sweet memory!

3.    Finally, to the reporter who wrote to complain that she "didn't like me" because, in an off-the-cuff comment in a throwaway line in a blog post of over six months ago that was read by maybe three people (two of whom are related to me), I "twisted her words": please accept my most Grand Canyon-esque yawn of abject inertia. I deny that I twisted anything, least of all your words, but now that I know that I bug you without consciously attempting to do so, I'll be sure to not only twist your words, but your tail, whenever the opportunity presents itself. This is what happens to "one" when "one" takes "oneself" seriously, quite often by referring to "oneself" in the third person.

Keep those cards and letters coming kids. I don't have time to respond to them all, but I enjoy even the barking mad ones.

So Many Turkeys, So Little Gunpowder

I was going to post on a semi-serious topic, but since the day before Thanksgiving is generally a light day for pageviews, I thought I'd save it until after the holiday.

Instead, I'll just wish ya'll a Happy Bird Day!

The Day After

I'm a bit stretched for time, so I'll keep my immediate post-election screed brief. They'll be plenty of opportunity for bloviatory bombast and cheap shot artistry over the next four years, inasmuch as the agony of the last year of campaigning has left us on November 7th in pretty much the same screwed state of affairs we were in on June 6th.

Selfishly, I was cheered to see this morning that Princess Spouting Bull will be staking her Tipi on the same sacred soil on Capitol Hill that is very close to that soon to be vacated by Frodo Frank, the Hobbit from the same happy hunting grounds that Ms. Lizzie now calls "home" since her family fled The Nation lo these many moons ago. The bonus of forcing "Mr. Cosmo" to drive his dirty 4-by-4 back to the land of Birkenstock-wearing cod-crunchers only enhances the pristine beauty of the moment. The only thing that would make me even more energized for another four years of delivering fist-fulls of snark would be to see Sheila Bair running for any national office in 2014. ANY office.

Forget about repealing Dodd-Frank or any part of it. It's here to stay, and so is the CFPB. As to the latter, expect the jack-booted minions to pull out the spit shine and get down to the business of serious buffing and waxing. After spending all year wondering whether they might have to polish their resumes, they've got no less than two years of tenure and likely much, much, more. Like facing The Plague in the 13th Century, you can either bring out your dead each morning and try to survive until nightfall each day as best you can in a scary world, or you can just decide that those multiples of book are looking awfully good, as are the tax-free beaches in Belize, cash in your chips, and run for your ever-lovin' lives. As for me, I wouldn't miss this end game any more than I would have had I been a citizen of Rome in 44 B.C. and watched the Caesars and their rapacious soul mates take down the Republic. I figure we've got the rest of this century left to run on the fumes of a half-remembered (and quickly fading) past, and I'll be writhing in Purgatory by then (if I'm lucky). Until that time, it's going to be a hell of a show. Sorry about the kids, though.

A final, very preliminary thought: if any of you think the CFPB might be the poster child for potential regulatory abuse or high-handed legal thuggery, they simply haven't had the opportunity to gain traction yet. Sure, with time, they'll sharpen the long knives to a fine edge, but they're simply not there. No, for the near term, I'd watch the old pros in the federal financial institution regulatory agencies. My colleagues and I are seeing tactics we didn't even dream we'd see in the worst of the S&L meltdown of the late 1980s. More on that in the future, but for now, it's time to tend to the hangover.

Martyrdom Postponed

One of my quirky "Super Seven Lessons" for officers and directors of financial institutions about which I spoke to NAFCU compliance officers and attorneys last week in Seattle, is a line made famous by Winston Churchill: "Although prepared for martyrdom, I preferred that it be postponed."

What I'm referring to is the suicidal tendency of some bank executives I've encountered over the years to think that they can respond to what they believe to be "provocations" by their federal or state regulators with open hostility, even a "jihad of snark." While guns-for-hire like the author of this blog may have a certain latitude to crack wise, I never recommend that officers and directors follow suit. For one thing, the bargaining positions are not equal, especially in cases where the financial institution may be having actual financial difficulties, and regulatory criticisms, such as those found in reports of examination, are, to some degree, either justified by the facts or at least arguably sufficient to pass the laugh test. The regulators have a large toolbox full of pain that they can whip out and employ to make a management team and board of directors miserable for months, even years, to come. To the contrary, unless the regulators are acting in a fairly obviously arbitrary and capricious manner, the courts are going to defer to them, and the institution is unlikely to prevail in a legal challenge.

Moreover, I think that regulators can possess the memories of elephants. Even if they allow you to escape the axe today, they can nip and scratch at you over an extended period of time, worrying you with criticisms small and large. You can die from a saber thrust through the throat, or you can slowly bleed to death of a thousand tiny cuts. It can be decades before your supervisory personnel are ready to retire on their government pensions, by which time you might have long ago taken up basket weaving to distract you from the voices screaming in your head.

That is not to say that a banker ought to be obsequious or back down when important issues are at stake. Rather, it's a matter of style, and a matter of picking your shots. I simply see no future in open hostility with your regulator except as a last resort (and then, of course, you must "unleash the hounds."). Those instances ought to be rare. In all other circumstances, maintaining rigid self-control and rising above those on the other side of the table is likely to prove the better course.

In other words, don't treat your regulator the way I treat them on this blog.

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I realize that many of my regular readers are hunkering down for the next few days and concentrating on withstanding the storm of a lifetime. My thoughts and prayers are with you all.

A Matter For Serious Consideration

I want to take a short break from repeatedly crossing the tedious intersection of banking and law to report on a more lively topic: time travel. Sure, Einstein believed the entire notion of past, present, and future to be merely "an illusion, although a convincing one," but for time travelers like Seattle attorney Andrew Basiago, cruising between the past and the present was as easy as wearing a pair of clown-sized shoes to Gettysburg.

As difficult as it might be to believe, I, too, time traveled as part of "Project Pegasus," although I wasn’t pre-pubescent, as was Mr. Basiago, but a hormone-filled adolescent lad in the prime of life when I made trips to the past on behalf of the secret U.S. Government project. Among my exploits in time-warping adventure, the following have been declassified:

• I took a M1A Abrams tank back to the Battle of Trebia in 218 B.C., where I managed to blast one of Hannibal’s four remaining war elephants into pachyderm tartare before the rest of his army simply ran or rode around a hill and I ran out of diesel. I had some fun expending my remaining ammunition on outcroppings and trees before I had to zip back to the future. Strangely, neither Livy’s nor Polybius’ account of the battle mentions this incident.
• I told the members of Pickett’s Division at Gettysburg on July 3, 1863 that while that mile of open ground in front of them looked like it might make for a dicey stroll, this whole day would make a heck of a mini-series. They looked at me like they thought I was crazy. Some people have no imagination.
• I lived for a month in a small village in central Scotland in the mid-13^th century and, while there, invented the scone. I was run out of the village for insisting that it should never be befouled with jam. Picts were testy about their shortbreads.
• Joan of Arc was actually pretty hot, in a really intense kind way, if you get my drift. A snappy dancer, too.
• I tried to convince Samuel Johnson to include the word "supercalifragilisticexpialidocious" in his dictionary, but he blew me off. The guy was a snob. So was that butt-kissing cypher Boswell, who trailed Johnson around like a lap poodle. "Oh, Doctor, I simply must write that down!" What a putz.
• In 1966, I sold Gene Roddenberry the line "Beam me up, Scottie" for $250, which was a nice piece of change in those days. My handlers got real tired of me using it every time I wanted to return to the "present." In that same year, I gave Rod Serling the idea for the scene at the end of "The Planet of The Apes" where Charleton Heston’s character discovers the remains of the Statue of Liberty sticking out of the sand. I gave that to Rod gratis, because he let me bum a couple of Salems from him. The man was a freaking menthol chimney.
• I shot the sheriff (but I did not shoot the deputy).
• I let the dogs out.
• I performed the last two while wearing a purple feather boa and a nose that honked when you squeezed it, for no reason other than it had never been done before. After all, it was the 1960s. However, my shoes were always properly sized.

So, you see, time travel is not only possible, but likely. You can believe every word I say because, like Mr. Basiago, and John Edwards for that matter, I’m a lawyer, and if a guy’s a lawyer, you can believe every word his forked tongue articulates, right?

Public Service

By now, I'm sure most readers have seen the public service announcement that Michael Douglas performed for th FBI on insider trading. For those few who might have missed it, and might actually care, here it is, lousy sound quality included:

The New York Observer got catty about it.

Apparently, doing this little favor for the FBI will have no effect on the long-term prison sentence of Mr. Douglas’ son, Cameron Douglas.

That was a low blow, albeit one deserving of a hat tip and a curt nod.

Much more effective, I believe, are the following public service announcements performed by the cast of the NBC sitcom "The Office." They deal with problems those of us who drool on ourselves and pick a banjo on a front porch a long way from The Beltway recognize as issues with gravitas.