More settlement happenings

Yves Smith:

If the Administration had really changed its stance on bank misdeeds, you’d see it putting the settlement on hold until the investigations led by Schneiderman had been concluded. The fact that they mortgage settlement is proceeding on schedule says this the Administration is, as before, trying to cover up its bank-favoring actions with better propaganda.

It’s really hard to disagree with this assessment of the state of play.

To make matters worse, Smith has another post looking at the scope of the settlement and the implications of a number of the specific questions Nevada AG Catherine Cortez Masto raised in relation to how broad or narrow the liability release that goes along with the settlement will be. Smith also points out that while the press is on to get California to join the deal (latest reports show CA was offered $15 billion out of the $25 billion package), other AGs don’t know how much money their state will get or how allocation of that money will be decided. In short, the push seems to be to get people to sign on to a deal that prevents states from prosecuting banks for robosigning, for forging mortgage assignments, for committing perjury and fraud, and doing so with zero guarantee that their state’s citizens will get financial relief from the settlement. Smith writes, “It is hard to fathom how any responsible attorney general can agree to this deal not knowing what they are getting for their constituents.” Agreed.

I’m by no means convinced that a deal will come in the immediate future. There appear to be too many outstanding questions for the outside AGs to get back in the fold. But then again, the promise of the Schneiderman task force may be enough to move people.

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