WASHINGTON — Sen. Sherrod Brown is urging regulators to block banks from receiving tax breaks on legal settlements, on the heels of a multibillion-dollar settlement involving mortgage foreclosures.
The Ohio Democrat wrote a letter Thursday to Federal Reserve Board Chairman Ben Bernanke, and Comptroller of the Currency Thomas Curry, asking them to reconsider provisions that allow institutions to write-off payments they make as part of settlement agreements. He pointed in particular to the recent $8.5 billion mortgage settlement with the agencies over unlawful home foreclosures.
"It is simply unfair for taxpayers to foot the bill for Wall Street's wrongdoing. I urge you, the Justice Department, and the other financial regulators to adopt the practice employed by the Securities and Exchange Commission, which prohibits companies from deducting settlement costs as a business expense. This rule should apply to this settlement as well as any future settlements with financial institutions," said Brown in the letter. "Breaking the law should not be a business expense."