Do note that HSBC didn\’t get fined for handling drug money. It got fined because its paperwork processes for identifying whether it was handling drug money were deemed inadequate.
This is, I think, an important point. And to see the full glory of bank paperwork, how about this from Northern Rock:
More than 150,000 customers at the state-owned Northern Rock will have their interest payments on loans handed back to them due to paperwork errors, the Treasury has admitted,
So what happened?
George Osborne, the Chancellor, told MPs that due to administrative errors made in 2008, loan agreements for around 152,000 Northern Rock borrowers were invalid. “As a result, interest payments on these loans are not legally enforceable,” he said.
Got to be a terrible error, eh?
Under the terms of the Consumer Credit Act, lenders have to print on all statements made to customer the size of the loan they were originally offered. In 2008, after Northern Rock was nationalised and divided into the “good” and “bad” banks, the state-owned part failed to ensure these statements were made. In the absence of that mandatory information, “borrowers are not liable for interest”, the Treasury said.
Yup, if you don\’t tell peeps the amount of the original loan then you can\’t charge interest. Ghastly error etc etc. And do note it was the state run part that got it wrong. An interesting counterblast to that idea that we should have state run investment banks, eh?
But it does help to explain that HSBC, and the Standard Chartered and other, case(s). They\’re not being fined because they handled the criminal bastards\’ money. They\’re being fined because they didn\’t get the paperwork right to prove that they weren\’t handling the criminal bastards\’ money.
And even the Government gets such paperwork wrong at times, eh?