Big news over the weekend. California has broken away from the weak Attorney’s General settlement, which will likely collapse whatever possibility their was of sweeping the big problems with foreclosure fraud issues under the rug. LA Times Blog:
California Atty. Gen. Kamala Harris will no longer take part in a national foreclosure probe of some of the nation’s biggest banks, which are accused of pervasive misconduct in dealing with troubled homeowners.
Harris removed herself from talks by a coalition of state attorneys general and federal agencies investigating abusive foreclosure practices because the nation’s five largest mortgage servicers were not offering California homeowners relief commensurate to what people in the state had suffered, Harris told The Times on Friday….
[NY AG] Schneiderman has been highly critical of the proposed 50-state settlement and expressed concern that his counterparts in other states may let the banks off too lightly and provide immunity from other efforts to bring them to account for misdeeds….“Attorney General Schneiderman looks forward to his continued work with Attorney General Harris and his other state and federal counterparts to ensure those responsible for the mortgage crisis are held accountable and homeowners who are suffering receive meaningful relief,”
This is a fantastic move for those who think the foreclosure fraud issue is the center of many of our biggest problems. A foreclosure fraud investigation, as opposed to weak settlement, would involve getting at accountability for what Wall Street did during the bubble, fighting for Americans dealing with a broken, vicious and feral servicing industry and also dealing with a major part of why the recession is so awful and the recovery is so weak. California walking away with a nod to what Schneiderman is accomplishing in New York put more pressure on serious high-end investigations and moves other AGs to move towards a more aggressive stance.
When I listed what I thought the Occupy Wall Street movement should consider as part of their demands, I put supporting Schneiderman and other active AGs on the list. It seems hokey for a radical movement – support your local elected officials! – but it really is the only piece of government in motion capable of getting to some level of accountability on Wall Street. I encourage the OWS movement to take some time and see how they can push the AGs in their respective states.
California didn’t wake up one morning and decide to call off the settlement. There’s been serious efforts to educate on the topic and mobilize people against sweeping the problems under the rug. Dave Dayen has done a ton in the writing and educating category, and he lays out the story along with highlighting some of the other people who worked towards this:
…It took a grassroots movement and allies at the leadership level to close this circle, to say no to another bank bailout, to demand accountability and justice for corporate crimes. The grassroots and netroots leaders started agitating. People like Yves Smith at Naked Capitalism and other finance bloggers, along with reporter types like Shahien Nasiripour at the Huffington Post, provided the information that detailed the fight. Reporter Abigail Field’s report for fortune, simply looking at the mortgage documents in one community in New York City and finding a high degree of fraud, produced a better investigation that any state or federal agency. Lawsuits eventually identified Field’s report and other revelations dredged up by reporters and commentators as proof of bank crimes.
Faith and community groups like Pico and ACCE and National People’s Action and The New Bottom Line and countless others got to work. It wasn’t really the traditional housing advocacy groups that led this fight, but a second wave of more aggressive groups which participated in direct action. They got Iowa AG Tom Miller on the record saying “we will put people in jail” for foreclosure fraud, an admission he almost immediately walked back. They started pressuring their own AGs in their home states, asking them not to sign on to a whitewash settlement that would deprive them of their ability to conduct a real investigation.
There were some allies in more official positions. The Congressional Oversight Panel was an early ally that took many of the banks – and Administration officials – to task. Hearings in the relevant House and Senate committees were informed and often piercing on the issue. Members of Congress like Jeff Merkley and Brad Miller were reliable allies. The Financial Crisis Inquiry Commission and the Senate Permanent Subcommittee on Investigation reports gave more knowledge to activists to push against a whitewash.
The big breakthrough was when New York Attorney General Eric Schneiderman decided he would not be a party to facilitating crimes, and initiated his own investigation. At first, he only found one ally, Delaware’s Beau Biden…And the momentum between community groups and netroots figures and progressive organizations grew. This issue was a backwater until recently, but in the last few weeks, CREDO, MoveOn, Progressives United, Color of Change, PCCC (a group with a wildly different electoral focus) and probably a half-dozen more I can’t think of stepped up big, demanding of state AGs to stop this move to a settlement…
I’ve had the pleasure of meeting or talking with most of the people Dayen points out, and they are all people who have fought for this issue tooth-and-nail over the long haul against difficult odds. Congratulations, all – sometimes activism gets to win one.