The $1.8 billion in consumer relief is not actually a penalty, since most of it is money that has already been lost, and is only being recognised now under the pretence of it being a penalty.

> "The consumer relief will be in the form of principal forgiveness for underwater homeowners and distressed borrowers; financing for construction, rehabilitation and preservation of affordable housing; and support for debt restructuring, foreclosure prevention and housing quality improvement programs, as well as land banks."

The principal forgiveness had to happen anyway in the normal course of business, one way or another. If underwater homeowners and distressed borrowers owe you a billion dollars, that does not mean that those mortgages and loans are worth a billion dollars in reality. At best you can realistically hope to eventually be repaid 60% of that (to pick an arbitrary number), given that these are distressed borrowers we're talking about. So writing down those assets in your books to e.g. $600 million dollars does NOT constitute a penalty or consumer relief of $400 million, since your assets were not really worth a billion to begin with and probably haven't been for years.

Same for the rest of the "relief", for example foreclosure prevention is almost always a net positive for the lender. Finding a way for the owner to stay in the house, look after it, and keep repaying whatever they can afford, will usually recoup more money for the bank than a distressed sale at auction (how foreclosed properties are usually sold).

Principal relief for homeowners who are above water and up to date with mortgage payments, now that would be an actual penalty