As Time Magazine , Rolling Stone , the Wall Street Journal , Washington Post and local papers all over the country are now noticing, the stand that New York Attorney General Eric Schneiderman has taken against the Obama administration and five largest mortgage firms is building drama.
After CBS Marketwatch called the all-too-kind settlement being offered to the mortgage giants " another bank bailout ", the NY Daily News reported Schneiderman got a lift from New York's Congressional delegation in the form of a letter sent to the Iowa Attorney General Tom Kelly. Kelly removed Schneiderman from the 50-state negotiating panel for objecting to a grant of blanket immunity from state fraud investigations and the NYS Dems did not appreciate this.
Kelly also shared some none-too-kind words about Schneiderman for "undermining" the work of the committee, which he wants to conclude expeditiously with a narrower settlement, focusing only on foreclosures and mortgage servicing practices. Kelly has been criticized in Iowa and elsewhere for serving the big banks who have contributed greatly towards his campaigns.
Schneiderman, elected to enforce the rule of law, wants to use this 50-state panel to immediately investigate the cause of the mortgage backed securities crisis that led the United States into the most debilitating economic tragedy in a lifetime. Attorney General Kelly, along with Obama's HUD Secretary and Treasury Secretary Tim Geithner are noticeably anxious to rush through a settlement that does nothing to confront the dangerous moral hazard of unregulated securitization or hold to account the crooks who designed them to be impossible to detangle, costing taxpayers billions.
Rolling Stone's Matt Taibbi was not shy in suggesting Obama may want to cuddle up to these banks in time for election contributions, abandoning the "small individual donor" he prided himself on for the historic 2008 election he won as our economy was crumbling. Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc. and Ally Financial Inc. are the firms in question, but other toxic debt bundlers are also watching keenly.
The signatories to Rep. Jerrold Nadler's letter of support was sent to Miller and included every Democratic Member of Congress in the state -- Louise Slaughter, Charlie Rangel, Gary Ackerman, Maurice Hinchey, Eliot Engel, Carolyn Maloney, Carloyn McCarthy, Nita Lowey, Kathy Hochul, Yvette Clark, Nydia Velasquez, Joseph Crowley, Jose' Serrano, Brian Higgins, Yvette Clarke, Bill Owens, Paul Tonko, Edolphus Townes and Steve Israel, Gregory Meeks and Tim Bishop.
This display of party unity begs the question -- will Governor Cuomo weigh in on the issue as the grassroots are mobilizing? Last week, a petition was circulated by Citizen Action of New York ( sign it here ) and late word came today that a group including AIG, the FDIC, and various ripped-off banks, insurers and fund managers are joining Schneiderman and Delaware Attorney General Beau Biden in a lawsuit against Bank of America Corp., seeking to block any settlement and move the case to federal court.
If you have not yet written AG Schneiderman to support his investigation, click here . To complain to HUD Secretary Donovan, email to Secretary.Donovan <at> hud.gov or " tell your story " to the Consumer Finance Protection Bureau overseeing the negotiations. Email the White House here or send a message to Geithner at the US Treasury on Facebook here .