Investigate the Banks

A message from CREDO Action:  After months of activism from people like you, President Obama announced in his State of the Union speech the creation of a new task force to investigate and hold banks accountable for causing the foreclosure crisis and financial meltdown.

The task force will have five co-chairs, one of whom is New York Attorney General Eric Schneiderman, a progressive hero who has worked tirelessly to hold the Wall Street banks accountable for their crimes.

CREDO joined other groups in calling on President Obama to announce an investigation into the mortgage fraud that led to the economic collapse.

And we are heartened that the President of the United States responded to this grassroots pressure with such a high-profile mention in his State of the Union address.

This is especially remarkable when some were speculating that the president might use the address to announce a deal with the mortgage servicers that would grant the Wall Street banks immunity from prosecution of crimes that have not yet been investigated.

Given the White House's abysmal record on holding Wall Street accountable, President Obama's State of the Union announcement was so extraordinary that many of our allies in the progressive movement have declared victory.

We certainly hope they're right, but from our perspective it is still too soon to know whether this will lead to the kind of meaningful justice the American people both need and deserve.

One of the greatest sources of potential good in the creation of this task force comes from the inclusion of New York Attorney General Schneiderman, who has been at the forefront of bank accountability fights, as one of its five co-chairs.

Yet aside from Attorney General Schneiderman, none of the other co-chairs has done literally anything that achieves our goal of holding banks accountable or prosecuting bankers for criminal activity.

What's more, the task force won't be independent but will be housed in the Justice Department's Financial Fraud Task Force which President Obama established in 2009 "to hold accountable those who helped bring about the last financial crisis." That earlier task force has failed to prosecute a single banker in conjunction with the mortgage crisis or hold Wall Street accountable in any kind of meaningful way.

It's also concerning that three of Schneiderman's four co-chairs are already members of the current, failed task force at the Department of Justice.¹ This means they will have to start behaving very differently if this new task force will follow through on the president's promise of a real investigation.

Time will tell whether Attorney General Schneiderman will be empowered to aggressively leverage the authority and investigatory resources of the federal government to hold banks accountable, or if his inclusion will serve as a little more than a symbolic ploy in an attempt to quiet the restive base that has reacted with outrage at the lack of accountability for Wall Street's crimes.

We expect Attorney General Schneiderman will push very, very hard to make the work of the task force a meaningful step toward the prosecutions that have shamefully been missing from any federal action on Wall Street accountability in the last three years.

If Attorney General Schneiderman is able get his fellow co-chairs on board and launch investigations with teeth from his perch within the Department of Justice, this will be a good development indeed.

And we have no doubt that if Attorney General Schneiderman is muzzled in Washington, DC he will simply return to New York, where he can use subpoenas and his powers under the Martin Act to investigate and then prosecute. This is exactly what he did to help scuttle the terrible 50-state deal with the banks pushed by the Obama administration, as did several other Attorneys General, including California's Kamala Harris and Nevada's Catherine Cortez Masto.

All that said, we still need to make sure that the Obama administration doesn't close the door on accountability for foreclosure fraud even while it opens the door to investigate other kinds of misdeeds by Wall Street.

This is particularly important given the news over the weekend that a terrible settlement deal with mortgage servicers is closer than ever.

The robo-signing scandal is just the tip of the iceberg. It simply makes no sense for anyone to settle with the largest banks over foreclosure fraud when there has yet to be a full investigation despite what Reuters called "copious evidence" of "widespread forgery, perjury, obstruction of justice, and illegal foreclosures...." ²

Six months ago many people thought that this kind of mortgage servicer settlement was a done deal, and that in addition to letting the banks off the hook for fraud and misdeeds when servicing mortgages, the banks would also be given immunity for precisely the behavior President Obama has tasked this new task force with investigating.

Not a single Wall Street banker has gone to jail for crimes related to the mortgage servicing scandal or the financial meltdown. But thanks to your activism, we have thus far stopped the federal government and state attorneys general from giving a sweetheart deal to banks that lets them off the hook for massive amounts of mortgage and foreclosure fraud.

We will continue to fight together to bring Wall Street criminals to justice.

In the wake of the State of the Union we celebrate your activism and its continuing impact on the White House. When there are indictments we will celebrate victory.

Until then here are five things you can do to bring justice to Wall Street.

1. Tell New York Attorney Eric Schneiderman: Indict Wall Street criminals immediately and we will have your back.
2. Thank California Attorney General Kamala Harris for continuing to help block a bad 50-state settlement.
3. Tell your State Attorney General not to accept any settlement with the Wall Street banks that grants them immunity for crimes not yet investigated.
4. Tell House Democrats: Co-Sponsor the Baldwin resolution and go on the record opposing any deal that would grant mortgage servicers criminal or civil immunity for potential wrongdoing related to illegal mortgage and foreclosure practices.
5. Tell President Obama: Stop pressuring the state attorneys general to cut a sweetheart deal with the banks.

Matt Lockshin, Campaign Manager
CREDO Action from Working Assets

1. "There's Already a Financial Fraud Task Force," David Dayen, FDL News Desk, 01-25-12.
2. "U.S. AG Eric Holder, DoJ Head Lanny Breuer Linked To Banks Accused Of Foreclosure Fraud ," Scot J. Paltrow, Reuters, 01-19-12.