Never mind twerking, US regulators are doing the bank spank.
Washington watchdogs are delivering a good old Beltway beat-down to the nation’s biggest banks — pressing civil actions for tens of billion of dollars for alleged sins in mortgage bonds, mispriced loans and credit derivatives.
In fact, the legal bills to defend the actions from regulators over the last five years for the six largest banks have stretched to more than $100 billion — or $51 million a day, according to a report.
That’s enough to wipe out all of the 2012 profits from all of the six large banks, according to the report by Bloomberg.
“This is just another assault by the American government on the banking industry that has [government regulators] utilizing every legal tactic in their arsenal,” outspoken bank analyst Dick Bove at Rafferty Capital told The Post.
“This regulatory attack is going to result in everyone from stockholders to bank employees losing their jobs, Bove added.
The legal bills of JPMorgan, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo were included.
Outsized penalties for banks like JPMorgan, which is facing the possibility of forking over a whopping $6 billion to settle a suit filed by the Federal Housing Finance Agency over soured mortgage securities, have picked up over the past 12 months.
Jamie Dimon’s JPMorgan has set aside $6.8 billion to cover legal costs and already has paid roughly $7 billion during the past year to cover fines and legal costs.
It’s gotten so bad that Bove has recently lowered his ratings on a number of institutions. That includes JPMorgan, which he downgraded from a “buy” rating to a “hold” after lowering his 2014 price target for the bank from $60 to $57 earlier this week.
Daniel Hurson, a former federal prosecutor, said the regulators may be stepping up their efforts now that the economy has recovered and solvency of the banks is assured.
Reports emerging yesterday indicated that Sen. Carl Levin’s (D-Mich.) Permanent Subcommittee on Investigations is requesting documents from the Federal Energy Regulatory Commission following the energy regulator’s $410 million fine on JPMorgan, charging that it manipulated California electricity prices.
A JPMorgan spokesman declined to comment.
JPMorgan and BofA account for about 75 percent of the legal costs being coughed up by banks since 2008, according to Bloomberg News.