Not only are the big banks responsible for collapsing the housing market, their irresponsible actions led to millions of workers losing their jobs through no fault of their own. And just a few months ago, the banks thought they had a deal that would give them blanket immunity for all their wrongdoing in exchange for just pennies on the dollar for what they owe California families. That would have been a slap in the face to every California family who’s suffered because of the banks’ illegal actions.
Fortunately, our Attorney General, Kamala Harris, resisted that settlement and fought for a better deal for Californians. With the announcement today of the national Attorneys General mortgage settlement, we finally see a critical, real first step in holding the banks accountable for cratering our state’s economy.
However, we need to be perfectly clear about one thing: this settlement must be the first step, not the last, in making the banks pay for what they have done to our families and communities.
The gains in today’s settlement would not have been possible without the principled leadership of Attorney General Harris. In the face of enormous pressure from the banks to let them off with a slap on the wrist, Harris stood firm, ensuring that California families received a measure of justice for the devastation the banks wrought. She said no more bank bailouts, no blank checks and no blanket immunity.
Her courageous stand resulted in significantly more relief for Californians than expected, and helped all the states get a better deal. We commend Harris and New York Attorney General Eric Schneiderman for refusing to sign on to any settlement that would let the banks off the hook or prevent investigations from continuing.
Today’s settlement offers real progress: $26 billion in relief, with $18 billion coming to California families; a new taskforce on mortgage fraud; some important reforms to protect borrowers; and we've preserved the right to go after the banks for their deceptive practices.
There is no doubt that the settlement amount pales in comparison to the $750 billion in lost home values. California’s unions will continue to work with AG Harris to fight for homeowners and hold the banks accountable.
We should extend the provisions of the settlement to all banks and make sure the reforms are made permanent. We should also pass legislation to establish basic protections for homeowners, promote principal reduction to restore home values, and rebuild our neighborhoods to revive our economy.
We need vigorous investigations of the deceptive and illegal practices that took advantage of families just seeking the American Dream, and destroyed our economy in the process. We see the devastation every day in the faces of laid-off workers, shuttered businesses, empty foreclosed homes, and blighted neighborhoods. We know bankers made billions repackaging these loans and selling them to investors. That's not just wrong, it’s criminal – and it’s time to send those who flouted the law to jail.
Our economic recovery hinges on keeping families in their homes and reducing what they owe to the banks. We are one step closer today. The road to accountability starts here.