Actually it is.
What banks usually do is loan money only to those that will probably pay it back, and the people who don't get loans are those with higher default risks. If banks are forced to make loans to more than just the people who repay, the only choice is to knowingly loan to people who'll probably not repay. The only way to make banks accept those losses, is to make it clear that those losses would be less than the costs of threatened law suits.
What many banks didn't count on was that they'd be blamed for the expected defaults as 'predatory lenders'.
More info here.
...You mean...
Whatever I may mean or not mean doesn't change how banks work. They either loan to those who can repay, or the banks fail. No way around it. It's a reality that we either learn to deal with or we change the subject.
...The financial crisis was not caused by...
Ah, you're opting for a change of subject over to all the things you believe didn't cause the crisis.
cheers.
You are opting to try to silence the truth by erasing it. The banks did fail. But your fairy tale does not address the cause. Your opt-ed is a tale that is based not on reality, but an ideology that bankers and lenders are honest, because they are 'wealthy entrepreneurs'. The reality is they are criminals who should be in prison.
How Financial Criminalization Crashed the Economy, and the Culprits Got Off Scot-Free
It is no exaggeration to say that since the 1980s, much of the American (and global) financial sector has become criminalized, creating an industry culture that tolerates or even encourages systematic fraud. The behavior that caused the mortgage bubble and financial crisis was a natural outcome and continuation of this pattern, rather than some kind of economic accident.
It is important to understand that this behavior really is seriously criminal. We are not talking about neglecting some bureaucratic formality. We are talking about deliberate concealment of financial transactions that aided terrorism, nuclear weapons proliferation, and large-scale tax evasion; assisting in concealment of criminal assets and activities by others; and directly committing frauds that substantially worsened the worst financial bubbles and crises since the Depression.
None of this conduct was punished in any significant way. On November 7, 2011, the New York Times published an article based on its own review of major banks' settlements of SEC lawsuits since 1996. The Times' analysis found fifty-one cases in which major banks had settled cases involving securities fraud, after having previously been caught
violating the same law, and then promising the SEC not to do so again. The Times' list, furthermore, covered only SEC securities fraud cases; it did not include any criminal cases, private lawsuits by victims, cases filed by state attorneys general, or any cases of bribery, money laundering, tax evasion, or illegal asset concealment -- all areas in which the banks have numerous and major violations. In Predator Nation, I provide detailed, well-documented accounts of behavior ranging from assisting Enron's frauds (Citigroup, Merrill Lynch), to fraudulently exploiting the Internet bubble (most of the major investment banks), to using for-profit colleges to exploit government student loan programs (Goldman Sachs), to assisting in money laundering and tax evasion on a large scale (at least eleven banks including UBS, Barclay's, and Lloyds), to using bribery and artificially complex derivatives to destroy the finances of a county government (JP Morgan Chase), to profiting from Bernard Madoff even while strongly suspecting him to be a fraud (JP Morgan Chase, UBS).
Total fines for all these cases combined appear to be far less than 1 percent of financial sector profits and bonuses during the same period. There have been very few prosecutions and no criminal convictions of large U.S. financial institutions or their senior executives. Where individuals not linked to major banks have committed similar offenses, they have been treated far more harshly.
Given this background, it is difficult to avoid the conclusion that the mortgage bubble and financial crisis were facilitated not only by deregulation but also by the prior twenty years' tolerance of large scale financial crime. First, the absence of prosecution gradually led to a deeply embedded cultural acceptance of unethical and criminal behavior in finance. And second, it generated a sense of personal impunity; bankers contemplating criminal actions were no longer deterred by threat of prosecution.
And just as the last twenty years of unpunished financial crime constituted a green light for the bubble, so, too, America's non-response to the bubble and crisis is setting the tone for financial conduct in the future.
