Borrowers and lenders

More than three years after recklessly speculative banking practices plunged the U.S. economy—and especially the housing market—into a freefall, five of the nation's largest banks agreed to provide $26 billion in relief to people struggling to pay mortgages or whose homes have been foreclosed. The banks are not doing this out of an inherent sense of justice; they've been pressured into it by the Obama administration and attorneys general from all 50 states, who have evidence that the banks have evicted home owners on the basis of improper or false documentation.

The legal settlement announced in February is widely seen as little more than a slap on the wrist for the banks, which are hugely profitable again after the industry was saved by the government's bailout. About 2 million home owners will be helped in the settlement, but the number who have lost their homes stands at 4 million, and 3.3 million more are close to foreclosure. Thousands of people who have lost their homes will now receive checks for about $2,000—not much recompense for lives turned upside down. The Obama administration has vowed to pursue further settlements with the banks.

Meanwhile, Americans are finding other ways to hold banks accountable to serving the common good. As banks impose more and more fees on their small (and less profitable) account holders, customers are turning from banks to credit unions, or financial cooperatives, which are oriented more toward service than profit. Felix Salmon, writing in the New York Times, reports that 1.3 million Americans opened credit union accounts in 2011—double the number in 2010—and he forecasts that if the trend continues, it will force banks to pay attention again to customers with modest incomes.