New Economic Perspectives has the article Bank Whistleblowers United Told DOJ to use 4506-T as Kryptonite v Banksters.
Had the regulators (particularly the Fed through its HOEPA power) required each bank making liar’s loans to conduct a 4506-T audit, the senior managers would have faced a dilemma. They could stop the fraudulent lending or provide DOJ with a great opportunity to prosecute them. The bank CEOs’ response to the internal audits showing endemic fraud and the retaliation against the whistleblowers combine to offer superb proof of senior managers’ ‘specific intent’ to defraud. The reasons for the failure to prosecute were some combination of cowardice and politics. If Democrats win control of the House they can use their investigative powers to force each bank regulator to cause every relevant financial institution to conduct a 4506-T audit.
Of course, the Republican Senate and House chairs could order those steps today. We are not holding our breath, but BWU’s co-founders are eager to aid either, or both, parties restore the rule of law to Wall Street. Instead, we are rapidly creating an intensely criminogenic environment on Wall Street that will eventually cause a severe financial crisis.
The level of corruption in our government displayed by its refusal to prosecute white collar crime is past the point where it is intolerable. Even our most progressive politicians aren’t pushing hard enough against this corruption.