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A new investigation by the Center for Public Integrity reveals that many of the banks receiving federal bailout money were responsible for the subprime mortgage crisis, rather than being victims of it. The prevailing myth in the mainstream media’s understanding of the crisis paints many of these banks as unwitting targets of toxic assets that have tainted their portfolios. But in fact, the banks controlled top subprime lenders that spent nearly $370 million over the past decade to fend off regulation. Bill Buzenberg, Executive Director of the Center for Public Integrity writes, “The mega-banks not only invested in subprime lending institutions — they were the enablers, bankrollers, and instigators driving high-interest lending, and they did so because it was so lucrative and unregulated.” By running a computer analysis of high-interest loans, the Center was able to determine that 25 institutions were responsible for more than 70% of all subprime loans. The majority of these institutions were owned outright or heavily financed by the biggest banks and insurance companies, names we all know well

GUEST: Bill Buzenberg, Executive Director of the Center for Public Integrity.

For more information, visit www.publicintegrity.com.