After the financial crisis of 2008, regulators in the U.S.
ordered banks to hire consultants to implement more than 130 “enforcement
actions,” which represent 15% of the cases. In 2011 alone, regulators mandated
that eleven banks hire consultants to determine whether mortgage borrowers had
been wrongfully evicted. The consultants collected about $2 billion in fees,
which amount to more than half of what homeowners were to receive under the
$8.5 billion settlement that ended the consultants’ work. According to
regulators, the consultants’ work was plagued with inefficiencies. This is
probably the least of it, for virtually any
expectations for “an industry that is paid billions of dollars by the same
banks it is expected to police” are bound to be chimerical in nature.
The full essay is at Institutional Conflicts of Interest, available at Amazon.
The full essay is at Institutional Conflicts of Interest, available at Amazon.