Kamala Harris' $12 Billion Deal With Big Banks: Cop-out or Solid Settlement for California Homeowners?
So did she cave in to the Big Banks, or secure a good deal for the people of California?
After holding out for a year, Attorney General Kamala Harris today announced that the Golden State is singing on to the nationwide settlement with the banks over their bungling of its loans to people who couldn't really afford them. (Banks blindly "robo-signed" flimsy loan applications, setting America up for mass foreclosure which, arguably, affected California the most).
Activists wanted the banks to be held criminally liable for the misdeeds that helped plunge the country into its worst economic situation since the Great Depression. This deal ...
... doesn't rule that out.
While it settles any civil claims the state of California has against the banks over the loans and subsequent foreclosures, according to the Los Angeles Times ...
... It doesn't bar individual borrowers or the federal government from filing suit over predatory lending; it doesn't stop prosecutors from bringing criminal charges; and it doesn't prevent states or the feds from addressing problems with mortgage-backed securities.
Harris today trumpeted the deal, saying it could bring as much as $18 billion in relief to Californians put out of their homes. Actual "principal relief" would be at least $12 billion, according to the A.G.'s office. Harris:
This outcome is the result of an insistence that California receive a fair deal commensurate with the harm done here. We insisted on homeowner relief for Californians and demanded enforceability so homeowners actually see a benefit that will allow them to stay in their homes, and preserved our ability to investigate banker crime and predatory lending.
Harris announced that she would expand the state's Mortgage Fraud Strike Force in the wake of the settlement.
The deal accounts for the lion's share of effected states' $25 billion settlement with Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.
Surprisingly, even gung-ho advocates for burning the banks down seemed okay with the agreement.
The group ReFund California, involved in some of the more raucous, Occupy-related protests last year, stated:
There is no doubt that the settlement announced today is stronger than it would have otherwise been, due to the courageous stance of AG Harris and others, who fought hard to bring more relief to homeowners and make sure that any settlement does not allow the banks to avoid accountability for fraudulent activity not yet investigated.
But the group noted that the average $1,800-per-effected-homeowner payout is peanuts (barely enough to cover a month's mortgage payment for most):
... The reported $1,800 restitution payment for those who already lost their homes is just a tiny fraction of the wealth stripped from so many families, especially families of color. That's why, as members of the ReFund California Coalition, the Alliance of Californians for Community Empowerment (ACCE), California Reinvestment Coalition (CRC), and PICO California will continue to fight to ensure that the current deal is just a down payment on a much larger investigation that brings justice to California homeowners harmed by the big banks.
More to come? We hope so.