I have changed a lot of my religious beliefs since my childhood, but have never changed this one: that how we will ultimately be judged (by ourselves, by other people, by history, and by a God if one exists) will be on how we will treat the people Jesus called “the least of these”: the hungry, the thirsty, the ill, the poorest of the poor. I also have always believed that the fates of middle-class folks who work hard and play by the rules but who are getting crushed by the most powerful are inextricably linked with those poorest of the poor, that their fates are bound together. And policymakers need to make a choice about whether they will side with the poor and middle class, or whether they will side with the most powerful.
It is sometimes difficult figuring out what to believe about policymakers. Policy making is complicated stuff, with many facets. Legislation and new regulations can have both good and bad aspects, especially on the biggest most important issues. Compromises and negotiations sometimes make a muddle of things. Tiny details in the wording of policies can turn what seems like a victory into a defeat. And things are definitely not always as they seem.
I’ve been definitely finding that on banking and housing issues lately: lots of murkiness out there. On other issues as well. Here’s something I saw yesterday that really ticked me off but may turn out okay: The Wall Street Journal published an item saying the Department of Agriculture was backing down, due to pressure from agribusiness interests and the Chamber of Commerce, on a rule to make sure the most basic legal standards regarding farmworkers were being applied to companies that USDA did business with. I was outraged, made angry calls and wrote emails to everyone I know in the Obama administration. By the end of the day I got a clarification from a senior administration official who wanted to remain anonymous, but said the WSJ story was in fact inaccurate. This source told me that they had in fact already tightened up requirements on contracting which could be done internally, and that USDA would not be doing any business with companies that violate key labor provisions. I was told that the rule being pulled back was very technical in nature and was in fact redundant to USDA’s current contracting requirements, that it simply was not drafted or taken through the rulemaking process properly, but that the USDA had absolutely tightened and strengthened requirements for their vendors to make sure they were only doing business and buying food from companies that were strictly adhering to the rules.
What seemed initially like bad news turned out, apparently at least, to be very good news. My excitement about that is tempered by the fact that the laws covering the treatment of farmworkers are quite weak, so merely not contracting with labor law violators isn’t exactly a high bar, but at least this looks like a real step in the right direction.
Now back to banking and the settlement talks over robo-signing, which are as murky as can be. There’s a new Huffington Post story out which raises some important issues, including questions around whether the settlement will help homeowners who are severely underwater, and whether “the proposed deal would give mortgage companies a pass on instances of illegal foreclosure practices under one percent of all their loans.” I have talked to senior officials in the administration who say that the latter issue, the pass for certain kinds of illegal foreclosure practices, is not accurate, and they are adamant that bankers would game the system if given full credit for partially writing down the mortgages of people who are so underwater they will lose their homes anyway. Another article by David Dayen raises serious concerns about whether the enforcement side of the settlement will be too soft on the banks, and the answer I got from administration officials on that was a lot murkier, so I worry that Dayen might turn out to be right. Meanwhile, my allies at New Bottom Line have issued a ring-the-alarm-bells statement attacking what they are hearing about the settlement. Finally, as one bit of definitively good news, Eric Schneiderman filed a major new lawsuit against the biggest banks in the country over the mess they created through MERS. This lawsuit, which is separate and apart from whatever the task force on financial fraud ends up doing, will have put serious new legal pressure on Wall Street’s biggest banks.
All of this happened in the last 24 hours! It’s hard to keep up with.
I will say this: my sense is that literally no one, including the people at the center of the settlement negotiations, know everything going on related to it right now. There are so many players and so many side conversations, it is ridiculous. I have heard several contradictory accounts in the last day about different aspects of the deal. It is not at all clear to me it is even going to finally come together.
I have always believed that ultimately, unless the good guys get hosed re: how narrow the legal release language is, that this settlement is a sideshow. If the release language is bad, the task force is dead, all efforts to hold bankers accountable are dead, and all efforts to get serious mortgage write down relief are dead. But if we win that battle, the big show is in the fraud task force tent. That’s where we have a real chance to achieve our goals, so that is where we have to keep the heat on in the coming weeks. We can’t let the DOJ or SEC or anyone else throw road blocks up, or slow things down. (Speaking of which: check out this absolutely outrageous story re: the SEC avoiding tough sanctions for the biggest banks, it will make your blood boil.) I for one am going to stay focused like a laser beam on calling them out if there is even an iota of evidence of that.
As for the settlement itself beyond the all-important release language, I think it is impossible to know until we finally see the complete language. I have a feeling there will be a lot in there I really don’t like, and I may well vehemently oppose it, but there may be some nuggets of unexpected gold in there as well, who knows. I don’t think we’ll know for sure until we see the full language as opposed to fragments and rumors. I do think it is a great sign that Schneiderman is moving full steam ahead on his big MERS lawsuit, which means he has confidence he won’t be blocked by a terrible settlement.
In the meantime, let’s keep hoping, and fighting for, a government that picks the side of the hard working, hard pressed middle class — and the least of these — as opposed to the side of Wall Street, which has been the side that’s been helped way too often the last few years.