Thursday, March 10, 2011

Like Bof A, JPMorgan fights back on forced principal forgiveness

It's not like we didn't already know the banks were opposed to forgiving principal on troubled loans, even though they claim they are doing a little of that now. But today CNBC's Melissa Francis got an earful from JPMorgan Chase's [JPM Loading... () ] Charlie Scharf, CEO of Retail Financial Services.

"We've got to be very careful that we don't create an environment where we encourage people not to pay, and that's the danger you have when you get into broad based principal forgiveness," said Scharf.

Already, Senate republicans are blasting any payment.

Sen. Richard Shelby, the top republican on the Senate Banking Committee, at a hearing today put the number to be "extracted" from banks at $30 billion.

"I question whether removing $30 billion in capital through a back-door bank tax is the best way to jump-start lending. The long-term consequences of this settlement could be even more serious. It would politicize our financial system," Shelby said in a statement, while calling for an investigation into what he deems a "regulatory shakedown...led by Elizabeth Warren."

Read on.

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