Originally posted at AMERICAblog.
Of all the state attorneys general in America, New York’s Eric Schneiderman has been most active in pursuing investigations of the foreclosure crisis and potentially illegal activities that have infected the housing sector. As a result, it’s not shocking that there now seems to be a concerted effort to smear Eric Schneiderman by Wall Street banks and their lackeys.
While investigating foreclosure fraud in New York, Schneiderman also has jurisdiction to look at fraudulent securitizations and settlements in this area, as we’ve seen with his action around the Bank of America/Countrywide settlement with Bank of New York Mellon. Schneiderman has also been vocal in his skepticism of the progress of the 50 state settlement talks being pursued by Iowa AG Tom Miller, the administration and major Wall Street banks. His opposition to a deal could result in it being scuttled and this scares the crap out of the banks.
First, via David Dayen, we saw Bank of New York trot out Katheryn Wylde, a member of the board of the NY Fed and president of Partnership for New York City, to the press to bash Schneiderman’s questioning of the merits of the BoA/BoNY settlement. Here’s the hit:
A BNY Mellon spokesman told me the bank didn’t want to comment on the broader implications of the AG’s filing, but directed me to Kathryn Wylde, CEO of the Partnership for New York City, a business development non-profit. She said that the AG’s “careless action” hurts New York’s standing as a financial center.
“It’s disappointing from the standpoint of the business community that the AG would make a fraud accusation against a major financial institution — in the press,” she told me. “And to not have any consultation with the institution? The bank was blindsided by what appears to be an outrageous charge.” (The AG’s press office didn’t respond to my request of comment.)
Dayen points out:
So you have a board member for an federal overseer of banks on Wall Street (Wylde claims that the NY Fed “serves no regulatory function,” which is just absolutely not true) attacking a state regulator for stepping into a settlement where he has found massive fraud in a preliminary investigation. She’s taking up for BNYM, which the NY Fed oversees, against the state Attorney General. This is just a classic case of regulatory capture.
There’s almost no way this is not coordinated. Wylde is pretty powerful in New York circles, I understand, and she’s raising fears of a slowdown to New York City’s main economic engine to stall regulatory oversight. The banks must continue looting, the story goes, or they’ll stop creating jobs in Manhattan.
Yves Smith of Naked Capitalism also weighs in against the attack from BoNY and Wylde:
“Fraud accusation…in the press”? This woman evidently has reading comprehension problems. If she had bothered to go through any of the news reports on the motion, the charges were not made in “the press”, they were made via a court filing.
And no, Bank of New York was not entitled to “consultation” when it is about to be accused of fraud, particular when the facts and law are as clear as they are in this instance. Her argument indicates either abject ignorance or deliberate deceit.
Ouch. That’s really embarrassing for Wylde. And again, this is a person who sits on the board of the New York Federal Reserve.
But this isn’t the only smear that’s being trotted out to undermine Eric Schneiderman’s investigation and pursuit of accountability on Wall Street. The New York Daily News has a story attacking Schneiderman for doing entirely legal and proper fundraising to pay off campaign debts – specifically a loan that he made to his campaign. There’s nothing at all illegal about him fundraising to pay a campaign debt, but clearly someone is pushing a story to impugn Schneiderman’s character.
Wall Street has a history of going after any attorney general who takes a serious interest in making banksters follow the law. The stakes here are incredibly high – Schneiderman’s investigations into robosigning and foreclosure fraud have the potential to cost banks tens if not hundreds of billions of dollars. That makes Schneiderman a high priority target and we’re seeing that targeting happen now. Schneiderman is doing critically important work that has the potential to hold lawless banksters accountable, to help keep homeowners in their homes, and to ensure that the rule of law – the foundation of our country – is maintained in the face of attempts by wealthy elites to twist it for their personal benefit. Anyone who cares about the outcome of his investigations should join together in identifying and opposing the smears, as Dayen and Smith have with Wylde and hopefully others will with the Daily News smear.