The Double Standards on Bank Crimes

Timothy Geithner (left), then Treasury Secretary, meeting with President Barack Obama in the Oval Office. (White House photo)

William R. Polk

Permit me to put on a different hat. Admittedly, it is moth-eaten and worn with age, but it may still rank as a hat. It dates back to the late 1960s when I became a member of the board of directors of a small bank near the University of Chicago where I was then teaching.

The Hyde Park Bank was both “progressive” in that it lent money to a variety of “minority” (that is mainly black-owned) enterprises and successful in that it acquired several other Chicago-area banks and founded two more. It was ultimately “sold down the river” to become through various mergers a part of the Chase system. But I made enough money from it – despite the fact that it was both progressive and honest – to put my children through college.

Let me address that issue of honesty. I served as chairman of the audit committee of the Board and so was schooled in what might be termed the ethics or at least the legalities of banking. I was sternly told that I was the “point man” of the Board and that if bank employees engaged in illegal or even imprudent activities, I was both legally and morally bound – and commercially wisely guided in my own interests – to report them. Otherwise, I was personally culpable. It would not be the bank that was guilty but I.

It is from this background that I have watched the various Treasury and Justice Department agreements to punish banking irregularities and/or felonies. Some of these abuses have been huge. As William K. Black points out in his bookThe Best Way to Rob a Bank is to Own One, the old fashioned way, hiding behind a bandana and waving a pistol, was not very efficient. People like John Dillinger and Slick Willie Sutton were amateurs. They made off with just the small change.

What they didn’t know was that banks keep little more than the change physically in their buildings. The really big money is in their distant accounts. But that, of course, is well known to the truly professional bank thieves. They would not bother threatening the clerks who cash the checks and accept the deposits.

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