NY Fed’s bottom line: Banksters above the law

Most people who buck the system are easily pressured to change course, but a few are more likely to get their back up and hold steady, at least until the pressure becomes unbearable. Gretchen Morgenson wrote today of one such stubborn fellow:

Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.

In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.

Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.

Donovan says he contacted Schneiderman out of a desire “to speed up help for troubled homeowners” victimized by so-called robo-signing, forged documents and other foreclosure tricks used by big banks. But Schneiderman and attorneys general in other states don’t like the idea of a pay-off to homeowners that would bar possible future litigation against banksters:

“The attorney general remains concerned by any attempt at a global settlement that would shut down ongoing investigations of wrongdoing related to the mortgage crisis,” said Danny Kanner, the spokesman for Mr. Schneiderman. His office has opened several inquiries into mortgage practices during the credit boom.

The U.S. Department of Justice is on board with Donovan — Let’s settle now and help the poor homeowners, and not look closely at the banks that helped ruin the economy. And you can be sure Barack Obama is on board — or, rather, hiding below deck in the hope that voters won’t notice how big a part he has played in letting banks off the hook for what are, at the very least, highly dubious business practices.

Footnote: Is this chutzpah or mere stupidity? Kathryn S. Wylde, a member of the board of the Federal Reserve Bank of New York, said she told Schneiderman

“… it is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street — love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.”

This entry was posted in economic collapse, Great Recession, Obama, Politics, The New Depression, Wall Street, world-wide economy and tagged , , , , , , , , , . Bookmark the permalink.

1 Response to NY Fed’s bottom line: Banksters above the law

  1. Pingback: Suburban Guerrilla » Blog Archive » NY Fed’s bottom line: Banksters above the law

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