Defenders of Eric Holder’s legacy on financial crimes keep saying that, although we sent no bankers to jail for their tsunami of fraudulent behavior, at least we punished the parent companies in settlements, and forced them to compensate victims. I call it “settlement justice,” and it has become the template for how the perpetrators of white-collar crime get treated in America.Usually, supporters of “settlement justice” tout the headline numbers ($37 billion!) and leave it at that. But it’s what happens after law enforcement signs the deal that matters. And one New Jersey lawyer’s detailed inquiry into a post-crisis settlement with Wells Fargo shows conclusively how banks wiggle out of their commitments, and why only prison cells can stop a Wall Street crime spree.The story concerns the “Pick-a-Pay” loan program, one of the more toxic mortgage offerings during the housing bubble. These loans offered a variety of different initial payment options for borrowers to choose: a sum corresponding to a 15- or 30-year fixed rate loan, an interest-only payment, or a minimum payment that created “negative amortization,” where the principal balance would actually increase with each passing month.Read More.Source: Salon/David Dayen