Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search
 

WillyT

(72,631 posts)
Sun Jan 29, 2012, 11:05 PM Jan 2012

Eric Schneiderman: Hero or Goat? - Robert Kuttner/HuffPo

Eric Schneiderman: Hero or Goat?
Robert Kuttner - HuffPo
Posted: 01/29/2012 9:00 pm

<snip>

The activation of the administration's long dormant task force on criminal misconduct in the financial collapse, with New York's progressive attorney general Eric Schneiderman as co-chair, could be the most fateful political and economic development of the election year. There are still immense pitfalls ahead, as Wall Street allies inside the administration and on Wall Street itself try to reduce Schneiderman's role to that of symbolic fig leaf.

But President Obama has done something potentially momentous for which he deserves our praise, even if he himself does not fully grasp the implications. The significance of the shift is still in play, of course, and will be made clearer as events unfold over the next several weeks.

Some skeptics in the progressive community have raised questions both about the upside for Schneiderman and his motives. Given the administration's feeble record on prosecutions to date, the critics are right to flag the likelihood that people like Attorney General Eric Holder and SEC enforcement chief Robert Khazumi will try to sandbag Schneiderman. But my reporting suggests that they underestimate both the man and the dynamics that have been set loose.

The surprising move raises several questions.

First Big Question: Why did Obama, after letting the Treasury, Justice Department, and SEC sit on potential criminal prosecutions for three years, do this now? There was, after all, an inter-agency Financial Fraud Enforcement Group appointed in November 2009, and it contented itself with going after small and medium-sized fraudsters and settling mostly for slap-on-the-wrist civil fines, rather than getting to the bottom of the systemic crimes and bringing major cases.

The answer is in a harmonic convergence of three forces...

<snip>

Much More: http://www.huffingtonpost.com/robert-kuttner/eric-schneiderman_b_1240453.html


1 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
Eric Schneiderman: Hero or Goat? - Robert Kuttner/HuffPo (Original Post) WillyT Jan 2012 OP
I just ProSense Jan 2012 #1

ProSense

(116,464 posts)
1. I just
Sun Jan 29, 2012, 11:15 PM
Jan 2012

read this, and leave it to Kuttner to write the have-it-both-ways title and article, though there is not much he can say to downplay that this is significant.

Eric Schneiderman: Hero or Goat?

But President Obama has done something potentially momentous for which he deserves our praise, even if he himself does not fully grasp the implications. The significance of the shift is still in play, of course, and will be made clearer as events unfold over the next several weeks.


Next Big Question: Why did Schneiderman accept this appointment? Who is rolling whom? Some critics on the left have argued that Schneiderman has all the authority he needs under New York State law (via the Martin Act that was also used by Eliot Spitzer in extracting a global settlement of conflicts of interest by the banks a decade ago). This critique has been all over such blogs as nakedcapitalism.com and firedoglake.com. The critics conclude that since the Obama administration has not been serious about criminal prosecutions thus far, it logically follows that Schneiderman has been co-opted into a process that will tie his hands. But the real dynamics are far more complex.


Big Question Number Three: Are plausible criminal prosecutions really possible? Short answer: yes. But it will take serious effort and resources.


Schneiderman has taken a stunning gamble. He may get the full cooperation that he needs, he may not. But one thing should already be clear. This is not a man who has been co-opted. He is nobody's window dressing.

There were a lot of jurisdiction and settlement issue to resolve across the states. It looks like the structure of the unit is going to allow them to maximize the effectiveness of the process.

He mentions Taibbi:

Matt Taibbi

A Victory for the Public on Foreclosures?

So there was big news yesterday on the foreclosure settlement front. We still have to wait and see what the final deal looks like, but there are reports out that the long-awaited settlement is a far, far better deal for the public than expected. If these reports are true, it looks like New York Attorney General Eric Schneiderman and California AG Kamala Harris have scored an enormous victory in narrowing the scope of the settlement to the point where it really only covers robosigning abuses.

According to reports (like this one in the Huffington Post), the deal will not include:

  1. Criminal liability.
  2. Tax liability
  3. Fair lending, fair housing, or any other civil rights claim.
  4. Federal Housing Finance Agency or the GSEs [Fannie Mae and Freddie Mac]
  5. CFPB claims for the period after they came into existence in July 2011
  6. SEC claims
  7. National Credit Union Association Claims
  8. FDIC claims
  9. Federal Reserve Board claims
  10. MERS claims
If that is true, and all of those things are out of the deal, and the banks are still exposed to liability not only for all of those things, but also for the broad range of offenses related to securitization, then $25 billion, dare I say it, might not even be a completely sucky number. It's far less than the real liability, but it's a much bigger sum than I ever thought would be negotiated just for robosigning.

I'm interested to see what the market reaction will be if this deal goes through. On the one hand the banks will all obtain some certaintly and relief from robosigning claims. But on the other hand, all the banks are still on the hook in other areas, nost notably putbacks of bad loans.

Score one for Schneiderman/Harris. Coupled with the news that the subpoenas have already started dropping on the securitization front, I'm almost optimistic.

http://www.rollingstone.com/politics/blogs/taibblog/a-big-change-on-the-foreclosure-front-20120128#ixzz1ktyVspa7

Latest Discussions»General Discussion»Eric Schneiderman: Hero o...