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What did they do now?

Last week, the Securities and Exchange Commission (SEC) announced that Bank of America had misused up to $58 billion a day in customers’ funds between 2009 and 2015. Actions by the bank’s brokerage unit violated SEC regulations in order to maximize the bank’s own profits, while putting customers’ investments at risk. As a result, Bank of America Corp is required to pay $415 million in fines.

This is just the latest in a long list of financial settlements due to bank misconduct. Large Wall Street banks have paid out more than $200 billion in 175 separate settlements since 2009.

Illinois could be on the hook for as much as $870 million in entirely avoidable payments.

In May, a court ruled that sixteen of the world’s largest banks must face antitrust lawsuits for their role in the illegal manipulation of the London Interbank Offered Rate (LIBOR). LIBOR is a widely used interest rate index that is used to set interest rates for trillions of dollars worth of securities worldwide, including in Illinois. Financial regulators and law enforcement authorities around the world have launched investigations into LIBOR manipulation. Several traders have been fired or put on leave from these banks, have been banned from working in the financial industry, or received prison sentences as a result. Nine bank companies, including JPMorgan Chase and Deutsche Bank, both counterparties to questionable deals with the State of Illinois, have already admitted to or were found responsible for illegally manipulating LIBOR.

Some of these same banks, like JP Morgan Chase, sold the state of Illinois ethically questionable financial vehicles, known as interest rate swaps. In November, these banks may try to force Illinois taxpayers to pay them $870 million, as part of an early termination of these interest rate swaps. It is essential that legislators and the Governor take action to prevent this scenario, in order to move Illinois forward toward financial stability, instead of greater turmoil.

It would be unconscionable for the state to let banks get away with forcing a massive $870 million payout, given their record of unlawful behavior. Several municipalities and public entities have successfully recovered taxpayer funds after taking legal action to investigate and correct the banks’ illegal actions.

In the past, our state and municipalities have been put at risk by elected officials’ unwillingness to take the banks to task for their wrongdoing. Especially during this period of financial distress, the state must pursue all avenues to save taxpayer dollars, including insisting that the banks deal fairly and legally. The main body responsible for investigating wrongdoing related to interest rate swaps and similar deals is the U.S. Securities and Exchange Commission (SEC). Illinois needs to call on the SEC for help.

The SEC should investigate, but public officials must ask first. If officials don’t live up to their oversight duty and ask the SEC to step in, the agency is unlikely to take action.

Illinois’ elected officials and statewide officers can and should call on the SEC to investigate the “toxic” deals that have already taken $684 million out of Illinois’ treasury, and threaten to take another $870 million. Illinois taxpayers worry about banks making off with our money. Public officials should worry, too.