PA Must Reads: The Banks Defrauded Your Local Government and Oppose a New Financial Industry Watch Dog: Coincidence?

A blog post by Mark Price, originally published at Third and State.

The Philadelphia Inquirer this morning reports that Wells Fargo has settled charges that it rigged bids on bond auctions affecting 150 Pennsylvania municipalities and agencies.

Here’s an idea: let’s in-source bond work to a new branch of Community Legal Services (CLS) that charges less than private law and financial firms and still earns enough surplus to subsidize the rest of the CLS mission. What’s that you say? That would impede the efficiency of the free market … I mean the pay-to-play political contributions from high-priced private firms that perform municipal bond work.

Wachovia Bank, now Wells Fargo, agreed to pay about $150 million to settle charges that former employees rigged bids for the reinvestment of $9 billion in bond proceeds between 1998 and 2004, guaranteeing Wachovia excess profits at the expense of cities, towns, and other borrowers, federal and state authorities said Thursday

The settlement requires Wachovia to pay millions in restitution to borrowers in 25 states. That figure includes $5.3 million to roughly 150 Pennsylvania municipalities and agencies, including the Pennsylvania Turnpike Commission, the Philadelphia Parking Authority, and more than a dozen school districts, State Attorney General Linda Kelly said.

While Wells Fargo was settling charges it defrauded taxpayers, the financial industry scored another political victory as a U.S. Senate filibuster blocked a vote on the confirmation of a director for the newly created Consumer Financial Protection Bureau (CFPB).