As financial Darwinism took over, it was no longer survival of the fittest. Some banks were too big to fail, some were too small to let live. Once again, both parties deserve the blame for this. Banks got rules to enable them to streamline their processes, and a wave of foreclosures hit. Done without paperwork. Without research. In some cases, without cause, as in the case of the couple I reported who paid cash and Bank Of America tried to foreclose on them anyway.
Last fall, the Attorneys General of all fifty states began looking into the practices of Bank Of America, Wells Fargo, JPMorgan Chase, and Citigroup. The leader of the crusade was New York AG Eric T. Schneiderman. But since then, two things have happened. First, a number of AG's simply lost interest in pursuing this. The other is the banks have united to cut a deal with the feds. They would rather pay a one lump sum ($20 bil) and end the lawsuits instead of dealing with several ongoing ones around the country.
Schneiderman has continued his pursuit of the banks. Now, it turns out the Obama Administration is putting the arm on him to drop his quest and let the feds handle this. Reported in the New York Times, "Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade Schneiderman to agree to the deal which changes no laws but protects the banks from future lawsuits.
This is what happens when Big Business is tied so closely to politicians -- not only do they get all these neat little rules made for them, but the politicians have a vested interest in protecting them. Not just for the contributions, but also the political black eye this can yield with a tough election season just around the corner.
As the saying on the Internet goes, "If you aren't outraged, you aren't paying attention."