The Federal Deposit Insurance Corp. (FDIC) is set to sue more than 50 officers and directors of banks that failed for more than $1 billion in losses related to the credit crisis, according to Bloomberg. The FDIC authorized the lawsuits during closed board sessions.
According to the Bloomberg article the FDIC has filed only one lawsuit against bank officers and directors of a failed bank, a $300 million suit involving IndyMac Bank executives. Since 2008, the FDIC has closed 294 banks. If suits are filed against the banks, an FDIC spokesman said the best scenario would be to try and get as many banks to settle as possible before an suits filed ended up in court.
In other financial news, some banks have suspended foreclosures, and proceedures for processing documents are being investgated. The banks are being investigated becuase mortgage officers are accused of signing foreclosure documents without actually reviewing them. Among the banks that have halted foreclosure processing are Bank of America, JPMorgan Chase, GMAC Financial, and PNC Financial Services. As government officials and consumer advocates call for more investigations, more banks are also likely to halt foreclosures as their procedures are scrutinized.