If you were trying to get a loan in southern Florida in 2007, bankers like James Theckston were there to help. "If you had some old bag lady walking down the street and she had a decent credit score, she got a loan," Chase's then-regional VP of Home Finance tells Nicholas Kristof. And Theckston says there's no doubt that though borrowers bear some responsibility for what Kristof describes as their "harebrained decisions," the bankers "were far more culpable," writes the New York Times columnist.
Chase account executives were given commissions seven times higher for subprime loans, so they actively sought out less-savvy borrowers. Bank bigwigs knew the loans were crazy, "but they figured, we’re going to make billions out of it, so who cares?" Theckston recalls. "The government is going to bail us out." And indeed it did. Big time, with a $7.8 trillion bailout that is equal to $25,000 per American. That isn't a scandal, but a "triumph," deems Kristof: Financial catastrophe was averted. But the homeowners bankers pushed into lousy loans have been mostly abandoned, Kristof observes, and therein lies the scandal. "When the federal government goes all-out to rescue errant bankers, and stiffs homeowners, that’s not just bad economics," he writes. "It’s also wrong."