Feds Slap Big Banks for Poor Program Compliance
Thursday, June 09, 2021 1:00 PM

When the feds stepped in to bail out the banking industry bank in 2008, one of the conditions was that banks cooperate with a mortgage assistance program. The program was designed to give homeowners who could make some payment a chance to work out a deal with their bank.

The program came under immediate fire for either being yet another example of the heavy hand of government groping around where it shouldn't, or a well-intentioned, much-needed program with no teeth.

Today, the Obama administration took action on the second part, the no-teeth part. It stopped making payments to three banking heavyweights until they improve their mortgage assistance program participation.

J.P. Morgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. won't get Making Home Affordable Program Checks until they address deficiencies found in a Q1 2011 review of the program.

Now the banks aren't going to really suffer great financial agonies over the loss of around $24 million, the amount the big three received in May, but it certainly is another black eye for a banking industry with a tarnished reputation.

Well, maybe a black eye with some consumers. Wall Street didn't bat an eye at the wrist slap, sending all three stocks higher today. J.P. Morgan (NYSE:JPM) was at $40.99, up $0.59, or 1.46 percent; Bank of American (NYSE:BAC) was at $10.67, up $0.13, or 1.24 percent; and Wells Fargo (NYSE:WFC) was at $26.02, up $0.66, or 2.60 percent.