Bank Of America Basically Wrote the Bank Mortgage Bailout Bill

In posts below we detailed the curious meetings between the Federal Reserve and private equity funds such as Carlyle Group, on the attempts to change banking regulations to make it easier for private equity funds to buy large chunks of banks. We wrote:

While we have no problem with free markets being allowed to operate, as we asked in our earlier post, what's all this "dialogue" between the Fed and Carlyle Group and other private equity funds about?... There's a few lessons to be learned here about how the power elite operate. First, they always take advantage of crisis to make a grab...[And]They always make things complicated.

Always be suspicious of "dialogue" between a regulator and the regulated. It usually ends up being a plot by the regulated to carve out some benefit.

Indeed, the mortgage crisis is turning into a feast for the well connected power elite to take advantage of the crisis atmosphere and use it for their own benefit. Not only is private equity attempting to grab the banks, but the elite banks are writing the mortgage bailout bill to their benefit. Where's my proof. Here's my proof. My comments on private equity attempting to grab banks is here, here and here. As for the power elite banks, consider:

It appears that Bank of America essentially wrote the bailout section of the Dodd-Shelby mortgage bailout bill. National Review Online obtained a copy of an internal Bank of America's 64 page “discussion document” on the Dodd-Shelby bill.

Stephen Spruiell at NRO writes:

Almost all of BofA’s preferences are mirrored in the Dodd-Shelby legislation. The BofA document even offers PR tips, such as “We believe that any intervention by the federal government will be acceptable only if it is not perceived as a bail-out of the bond market.”... the similarities between BofA’s ideal bill and the bill before the Senate are obvious even to the layperson — read the document, then read David C. John’s analysis of the bailout and see for yourself.

The bill itself, as would be expected, is totally to the benefit of the likes of Bank of America and Countrywide. (Bank of America agreed in January to buy Countrywide.) MrMortgage writes:

This $300 billion Dodd-Shelby bailout is an absolute crime. It bails out the banks by limiting their loss to 10%; a joke since many of the problem areas like CA are down as much as 30% already on the median in the past 12-months and the rate of acceleration of the price declines are picking up steam. The subprime crisis is nearly over and now Prime, Alt-A, Pay Option ARMs and Home Equity Lines/Loans are failing. If they get this $300 billion passed, another $1 trillion+ will have to come on its heels for all of the other bailouts.

This needs to be fought and/or vetoed or it’s potentially $300 billion of taxpayer money down the toilet.

Timothy Carney reports:

We call it the 'Bank of America bill on steroids.'" A House staffer told me that, demanding anonymity, but speaking on behalf of aides to GOP members of the House Financial Services Committee.