“I think if Thomas Jefferson were looking down, the author of the Bill of Rights, on what’s being proposed here, he’d agree with it. He would agree that the First Amendment cannot be absolute.” - Chuck Schumer (D). Yet, Madison and Mason wrote the Bill of Rights, according to Sheila Jackson Lee, 400 years ago. Yup, it's a fact.
It's the job of the investor to protect their money or the money they are responsible for to asses the validity of the business plan. If you're in the job of investing money in new business, or making loans of any type, it's your responsibility to ferret out which are the best start-up plans. There are certainly no shortage to choose from.
After receiving the loan, it is the responsibility of the business owner to make good on that loan. It should have been spelled out quite clearly in the B-plan break even analysis whether it would be possible. If the break even doesn't show even a chance at break even should the business fail, then the investor didn't invest wisely.
We had years of "you don't have to pay for things" on the government side -- low taxes and high spending. It was bound to slip over into private loans.
The article in the OP is crap. It's about a lawsuit. People (especially lawyers) say things in the course of a lawsuit that are complete BS. It's normal, and they all know it.
Let's also remember that many of the worst loans were made by mortgage companies, not banks. Most if not all these companies are out of business. BAC is in the trouble it is largely because it bought one of these companies.
There are always two sides to a bad deal. Here because of the layers there are more than two. You can also look at the big banks and investment companies that packaged these loans. You can also look at the pension funds and the like that chased yield and bought bonds without understanding, doing the homework to know what they were buying.
Plenty of bad actors all around. To try and pick one, seems like scapgoating. But that is just me.
One of you will end up here next!