But you know what? Bank of America got off easy with a $108m. FTC fine for all the dirty dealings of its Countrywide purchase.
In fact, this was nothing more than an accounting move between two units of the federal government. The FTC needed to book some revenue on the matter to look good for its board (Congress) and its shareholders (taxpayers) while BofA gets to put a messy merger in the rearview mirror for pennies on the dollar and get back to the business of borrowing money at zero interest from the Fed, lending it at zero-plus profit.
And if that weren’t enough of a set-up, there’s two more units of Uncle Sam Inc. — Fannie and Freddie — standing by ready to take on any dicey loans BofA churns out. Write, pawn off, modify. Repeat. It might not be the sexy stalking of takeover targets BofA enjoyed for years, but it is still a pretty good living.
Also never forget that the supposed transgressions of Countrywide were precisely what federal regulators and BofA loved about the operation — high-risk, high-fee, high-profit loans made to previously off-limits customers. Yet this fraud eventually grew too big even for derivative manipulation to mask by mid-2008. By the time the Fed sent Ken Lewis in to shore things up, it was too late.
