Los Angeles City Councilman Gil Cedillo wants to punish JPMorgan Chase for its various financial misdeeds, possibly by cutting off business with the banking giant. But as city leaders learned a few years ago when
Occupy L.A. pushed for a similar divestiture from big banks, outrage can be expensive.
Cedillo introduced a motion last week asking city staff to determine how much business the city pension funds and various departments have with JPMorgan Chase — one of many banks under scrutiny for the toxic mortgage schemes that triggered the recent recession — and the time frame and procedures needed to sever ties with it.
In a statement, Cedillo declared, "Someone must hold them accountable." But someone already has. The U.S. Justice Department, along with state regulators, reached a record settlement with the bank. It required JPMorgan Chase to admit it sold mortgages to investors without disclosing how risky they were — and to pay $13 billion. In total, the bank paid $20 billion in legal settlements last year to resolve lawsuits over its mortgage-backed securities and its involvement in the Bernie Madoff Ponzi scheme.
Is that punishment enough? Maybe. Maybe not. But what can the City Council do that the Justice Department, California Atty. Gen. Kamala Harris and an array of banking regulators haven't already done?