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Washington, D.C. --- Robert Borosage, co-director of the Campaign for America’s Future, is urging the Obama administration to investigate the big banks on mortgage related fraud before endorsing a settlement with them. With reports circulating of a pending state attorneys general settlement with the big banks that would immunize them from prosecution and civil suit in exchange for $25 billion, largely for principal reduction for underwater homeowners, the Campaign For America’s Future has joined in a broad coalition to oppose any sweetheart deal.
Statement from Robert L. Borosage, co-director of the Campaign for America’s Future:
“Americans from across the political spectrum are angry that the Wall Street banks blew up the economy and got bailed out, while home owners and taxpayers were stuck with the bill.
“This is a fundamental question of justice and democracy. The law is respected only if it is enforced. Cutting a settlement with the banks before there is an investigation violates our basic sense of justice. No one who robbed a bank would be offered immunity, a modest fine and no admission of guilt – before there was an investigation into who stole the money and how much they took.
“And there is a fundamental question of whether the democracy can hold the wealthiest few accountable. Americans are increasingly cynical about politicians, believing that Wall Street can buy and sell Washington. This is destructive to our democracy. The President’s campaign will highlight his commitment to fair rules and a fair shot for every American. A sweetheart deal with the banks would be a glaring contradiction to that theme. Any deal, enforced over the objections of the most independent Attorneys General, like New York’s Eric Schneiderman, will fail that test.
“What the people want is clear: Investigation before immunity. Penalize the perpetrators, not their victims. Any settlement must have sufficient scope to deal with the scale of the problem. There is an estimated $700 billion of negative equity in underwater homes. While 1 million homeowners have been helped by efforts to save homeowners, 10.7 million homeowners are underwater and that does not count people who have already suffered foreclosure. The top six banks paid bonuses worth $140 billion last year alone, or $420 billion over the last three years. They hold assets of $9.5 trillion. The rumored settlement of $25 billion is barely a slap on the wrist.
“It is vital to this country that the banks are made accountable. It is vital that they do not see the law as simply a minor price of doing profitable business, a speed bump on the way to their bonuses.
“With Occupy Wall Street inspiring activists and with citizens across the country being asked to pay to clean up the mess the banks created in the economy, every state Attorney General and the Administration should understand that any deal will receive widespread public scrutiny. Any settlement must be able to satisfy the standards of justice and fairness. What is now on the table does not come close.
“I want to laud Sen. Sherrod Brown (D-Ohio) and Rep. Brad Miller (D-N.C.) for defending the most vulnerable consumers and for advocating for better solutions to the foreclosure crisis.”