Ilyse Hogue takes a look at the missing task force on securitization abuses, which has done almost nothing since coming into being and announcing a few subpoenas a couple months ago. According to the liberal group CREDO, investigators for the task force have not yet been deployed.
CREDO’s petition asking President Obama to staff up the task force well beyond the original promise has already yielded over 100,000 signers and over 1,100 calls to Obama For America headquarters, and I’m told CREDO has not even contacted all their members yet. This level of engagement is an indication that others like me who tune back in to find expectations unmet will have a strong response. Notably, a response that has the potential to trump queasiness progressives have about criticizing a Democratic president in an election year. But also a responding audience that clearly wants to use the instruments at hand to create a win for all involved.
One unintended consequence of the establishment of the task force is that many Americans felt like they could rest easy that justice was underway. Part of this feeling stemmed from the clear engagement of President Obama in his State of the Union address and part stemmed from the reputation of strength and integrity of the chair of the body, New York Attorney General Eric Schneiderman. Given the massive entrenched interests of the banks and the hyper-partisan political landscape, though, it appears that allies in government will need a strong outside consituency to make progress on this issue. Not doing so would be a huge missed opportunity for our economy and millions of Americans still waiting for relief.
Um, there was nothing “unintended” about that consequence. It was the entire purpose of the establishment of the task force, at least from the Obama Administration’s perspective. Before then, they faced a united coalition of activists seeking justice for the largest consumer fraud in history. Afterwards, they had several progressive groups high-fiving their conduct, others moving on to find the one Bush-era official upon which to heap scorn, and basically a demobilization of the space. This allowed them to perform the foreclosure fraud settlement, which we can see as more inadequate with each passing day. And because the united front lost focus, the Administration has space to waver on the task force.
That coalition is being rebuilt. Tracy Van Slyke of The New Bottom Line writes in to say that they will build on CREDO’s criticisms this week and next. “We will continue to hammer on the investigation in different ways over the next few months,” she writes. For what it’s worth, I contacted a number of people on the Administration and the New York Attorney General’s office side of things, and none of them gave me any reaction to CREDO’s charges.
I think at some level, we’re looking at a case of “too little, too late.” There’s still seven months until the election, and that’s seven months of leverage if this coalition is willing to go there. But they’ve already lost one set of leverage with the settlement, and the task force can parry questions with the usual talk of an “ongoing investigation.” Meanwhile, the statutes of limitations slowly and gradually run out. And we’ll hear about how very hard it is to bring prosecutions against the banks.
So despite the fact that the foreclosure crisis is very likely to continue, despite the fact that mortgage servicers still screw their customers on a daily basis, despite the fact that they may not even be able to follow new servicing standards set up by CFPB, there still isn’t an independent activist movement that has shown itself able to force a reckoning and real accountability for rampant and ongoing financial fraud.
UPDATE: And just as I write this, I get the New Bottom Line’s latest, called “The Case of the Missing Mortgage Fraud Task Force.” An excerpt:
It’s been 77 days since the President announced in his State of the Union address the creation of a Mortgage Fraud Task Force that would go after big banks to “crack down on large-scale fraud and protect people’s investments.”
But almost three months later, finding any evidence of progress on the President’s promise amounts to a mystery that would leave Nancy Drew scratching her head.
We know shortly after the State of the Union, a plan was proposed to hire 55 federal agents for this large scale investigation. But to date, we don’t know who most of these investigators are and when they are going to start their work. But maybe the biggest mystery of all, is why have only 55 investigators been assigned to this case?
I believe NBL and CREDO are sincere, actually. However, I think there are plenty in the “Campaign for a Fair Settlement” coalition who will remain silent and sit on their hands in an election year.