Feb 21, 2013 17:31 EST “They’re a little guy taking the hit,” says Roy Oppenheim, a partner with Oppenheim Law in Weston, Fla., of DocX. “They committed massive fraud on a regular basis at the employ of the banks. The banks knew they were doing it.”
Time To Break Up ‘Too Big To Fail’ Banks Is NowApr 11, 2012 15:00 EDT
Fort Lauderdale, FL -- April 11, 2012 -- The drumbeats to break up our nation’s largest banks are starting to get louder and resonate, according to leading foreclosure defense attorney and legal commentator Roy Oppenheim.
Now that China is threatening to break up their own banks in order to make them more competitive, it is more crucial than ever for these so-called “Too Big To Fail” lenders be cut up into smaller companies, so that the U.S. can keep up with the rest of the world, Oppenheim says.
“The idea that only our TBTF banks can compete on the world stage is a fallacy and it’s a notion that’s only been propounded by the banking industry to basically preserve the status quo,” Oppenheim explains.
Oppenheim, creator of the South Florida Law Blog and co-founder of Oppenheim Law in Ft. Lauderdale, FL, finds it strangely ironic that the Premier of China recently called his own country's state-run banks a ‘monopoly’ that are unsustainable in their current form.
Comments like the ones made by Premier Wen Jiabao’s during a recent broadcast of China’s state-run radio, should be coming from the mouths of our own elected officials, Oppenheim says. “ It just shows you in whose pockets our banks are really in.”
“If China, a government not known historically for embracing capitalism is planning to break up their banks because of cronyism, we can’t be left holding the bag,” suggests Oppenheim.
The distribution of assets now unquestionably skewers in favor of the larger banks, Roy Oppenheim states, noting the Federal Reserve of Dallas’s most recent white paper, which shows the top 5 largest financial institutions controlled 52% of industry capital in 2010, as opposed to just 17% in 1970.
“Only when we have competitive, nimble, smaller banks that are able to seize new opportunities as they arise are we going to be able to compete on the world stage”, Oppenheim explains.
“The fact that China has reached that conclusion first is a disgrace, plain and simple.”
Oppenheim points to a glaring lack of competition amongst the TBTF banks as why they should be broken up.
He adds that when Bruce Springsteen, China, the Dallas Fed, and both the Tea Party and Occupy Wall Street are on the same page, it is time that the public take notice.
“I was stunned when in the Federal Reserve of Dallas agreed with me. I thought for a moment that they had gone rogue.” Capitalism, according to the Dallas Federal Reserve Annual Report “requires the freedom to succeed and the freedom to fail.”
But now, according to Roy Oppenheim, capitalism has been warped into a twisted mess, where there are two sets of rules, one for consumers, and one for the TBTF banks. Roy Oppenheim for years has criticized the notion that as a society we have privatized gains and socialized losses for the TBTF banks.
He points to the government’s historic breakup of AT&T, the steel companies and Standard Oil as proof that this country has broken up companies when they became too big to compete and hurt economic growth.
Oppenheim believes that the dysfunctional real estate market and high unemployment can not significantly improve until the banks are broken up.
“The economic engine of the U S works best because of creative destruction where large entities are destroyed either by their own size or incompetence.”
“We need a rebirth, back to a time where people looked up to the banking industry,” Oppenheim concludes.