NY Attorney General Schneiderman Removed From Foreclosure Settlement Group For Doing His Job

As scrutiny intensifies on Bank of America and pressure for a settlement mounts, Schneiderman isn't backing down.

We've written a good bit about New York Attorney General Eric Schneiderman lately, and with good reason: while most of the federal and state governments seem willing to go along with a pretty weak settlement over the massive foreclosure crisis and sign away any right to get restitution from the big banks, Schneiderman is pressing for a better deal. 

He's not alone, of course. Beau Biden of Delaware and Martha Coakley of Massachusetts have also signaled interest in continuing investigations after a settlement. 

But Iowa Attorney General Tom Miller has singled out Schneiderman, removing him from a "leadership role" in the settlement talks. An executive committee of 13 attorneys general, now not including Schneiderman, is leading the negotiations with the banks, supposedly on behalf of all 50 states.

One might think New York's AG would have a special interest in being closely involved with a settlement that involves Wall Street. But Miller referred to Schneiderman's concerns about the settlement as "undermining our effort." 

Schneiderman's spokesman said, “Ongoing investigations by attorneys general cannot be shut down by efforts to settle quickly and those responsible must be held accountable. While it is Attorney General Miller’s prerogative to remove us from the executive committee, we will continue to be an active voice on these issues as a part of the 50-state coalition and in other forums.”

And Marcy Wheeler notes that the attacks on Schneiderman seem to intensify as does the Bank of America death spiral.

She writes

"[Y]ou can’t separate the ongoing pressure on Schneiderman from the underlying issue–whether the analysis which BoA used, which depended on their own internal review of completely incomparable files, to declare themselves solvent is valid.

Because what Schneiderman is insisting on doing, both in the $8.5 billion proposed securitization settlement and the $20 billion proposed servicing settlement, is to try to look at the files.

Schneiderman is insisting on doing the analysis that BoA’s handpicked analyst didn’t do.

Now what do you suppose it means that BoA’s surrogates have gotten so angry and panicked and, well, dickish, as Schneiderman continues to insist on actually looking at BoA’s books before making a settlement with them? And do you really think it’s a coinkydink that increasing numbers of Wall Street vultures are raising doubts about what’s in those books at precisely the time Obama’s surrogates are increasing pressure on Schneiderman to drop the legal efforts to do so?"

As the attacks on Schneiderman increase, progressive groups are coming out in support. In a statement released by the group The New Bottom Line, activists express support for the New York AG's efforts. 

“Scheiderman was the first AG to say that he wasn’t going to back down on the big banks, and he was the first AG kicked out of the investigation,” said Judy Lonning, a member of Iowa Citizens for Community Improvement. “There’s no question who this decision favors.  It’s all about making life better for the big banks.”

And Schneiderman sent an email to his supporters this afternoon, saying "I am deeply committed to pursuing a full investigation into the misconduct that led to the collapse of America's housing market, and to seeking a resolution that gives homeowners meaningful relief, allows the housing market to begin to recover, and gets our economy moving again."

The attorney general praised by progressives like Katrina vanden Heuvel and supported by the Working Families Party is living up to his reputation and refusing to back down under attacks from the banks and pressure from the Obama administration. 

Yves Smith has called for support of Schneiderman against the ongoing attacks. She has more information at her blog. 

AlterNet / By Sarah Jaffe

Posted at August 24, 2011, 9:36am

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