Since details of the big foreclosure settlement began leaking out, liberals have been watching to see how New York Attorney General Eric Schneiderman would react, as a sign of whether the deal is a giveaway to big banks — or whether it contains the promise of real accountability.
In an interview with me just now, Schneiderman — who has gained a national liberal profile for his insistence on true accountability for financial institutions — conceded the settment announced today was “small” in financial terms, given the struggles of underwater homeowners and people who lost their homes.
But he insisted that time will show that today’s settlement was a win — that it secured a framework that will ultimately result in a true accounting of the role big banks played in sparking the economic meltdown.
“This is a small step in an economy where we have $700 billion in negative equity, but it is a significant step,” Schneiderman said, in response to criticism that the $25 billion settlement was far too small given the injuries sustained.
“This is a down payment towards the overall goal of accountability, meaningful relief for those injured by the meltdown, and getting the facts out so we can ensure that this never happens again.”
Pressed on whether a settlement that could result in as little as $2000 per injured homeowner could really be called a victory, Schneiderman said the fact that banks had not obtained any immunity on pre-crash conduct would ultimately yield the fruits of a major victory for the left.
“The conduct that led to the crash is still fair game,” Schneiderman said. “I’m confident the releases are narrow enough so our investigation into misconduct should produce more significant relief going foward.”
Schneiderman vows to speak out if probe stalls.
Interestingly, Schneiderman vowed that if the task force to probe mortgage practices set up by the president — which he co-chairs — stalls or drags its feet, he would speak out publicly against it. Some critics, such as David Dayen, have expressed skepticism that it would have the resources and leeway it needs to secure real accountability.
“I will speak up if I don’t feel that the rights of American homeowners are being protected and we’re not pursuing the investigation as aggressively as we should,” he said. “If things break down and things don’t work I’m prepared to speak up and take action. But the initial signs are really positive.”
Pressed on conflicting reports about whether the resources would really be there, Schneiderman said that a whole range of government agencies would be part of the probe. Importantly, he insisted this range would ensure a “full juristiction we need over all the different types of misconduct that contributed to the implosion of the economy.”
Schneiderman to left: “Take yes for an answer.”
Asked if progressives should be skeptical of the administration’s assurances, given the lack of accountability so far, Schneiderman insisted that Obama’s private and public assurances have left him convinced he is serious about a real accounting.
“He took ownership of this,” Schneiderman. “Sometimes people on the left have to take yes for an answer. The President is accepting the challenge. It’s time for progressives to say, `okay, he’s moving with us now, he’s using resources of government to aggressively pursue the malefactors of great wealth, as Teddy Roosevelt put it.’”
Perhaps most interestingly, Schneiderman said that the coalition of liberal, progressive and labor organizations that had come together to insist that the current settlement not let the banks off the hook would help force the task force to ultimately succeed.
“This will ultimately depend on the coalition that’s assembled around these principles,” Schneiderman said. “We’ve now got a progressive coalition that ... can move public officials to take a more aggressive approach.”