Statement by Senator Carl Levin on Settlement of Claims Against Washington Mutual Bank
Tuesday, December 13, 2011
WASHINGTON – Sen. Carl Levin, D-Mich., chairman of the U.S. Senate Permanent Subcommittee on Investigations, issued the following statement today on the settlement of claims against Washington Mutual Bank:
“Washington Mutual Bank epitomizes everything that went wrong with the banking industry and contributed to the financial crisis, so the FDIC was right to go after the bank’s leadership. Today’s settlement, however, shows again how bank executives can beat the system. Former WaMu executives Killinger, Rotella, and Schneider are truly the 1 percent: they got bonus upon bonus when the bank did well, but when they led the bank to collapse, insurance and indemnity clauses shielded them from paying any penalty for their wrongdoing.
“If the FDIC had demanded a higher settlement amount, the executives would, believe it or not, still not have paid it out of their own pockets, because they would have recovered their penalty payments from the failed bank holding company whose bills are being paid by, guess who, the FDIC on behalf of the public.
“The OCC, which inherited OTS’ jurisdiction over WaMu, may be able to impose civil monetary penalties against the former executives which likely would have to come out of their pockets. That option may still be on the table.”