Investigating the causes of the financial meltdown

Marketplace Staff Nov 10, 2011

Investigating the causes of the financial meltdown

Marketplace Staff Nov 10, 2011

Jeremy Hobson: The foreclosure mess is getting worse. RealtyTrac said this morning more homes went into foreclosure last month.

As for what’s being done about this — all 50 states have been looking into whether the big banks acted improperly in handling mortgages and foreclosures.

But two state attorneys general recently decided to venture out on their own and launch a separate investigation; that would be Delaware’s Beau Biden and New York’s Eric Schneiderman.

I stopped by Schneiderman’s office in lower Manhattan yesterday and started our interview by asking him why he and Biden left the group.

Schneiderman: The multi-state negotiations that had been going on when I took office relate solely to the conduct after the market melted down — to abuses in foreclosure practices, robo-signing, things like that.

The banks have been demanding releases for other conduct — for things that haven’t been investigated. And Beau and I and some other A.G.s have said we’re not giving releases for things that haven’t been fully investigated, we’re not giving releases for things that really aren’t the subject of the discussions underway.

Hobson: Now, you are an elected state official but people call you the “Sheriff of Wall Street,” just as they’ve called your predecessors in this position. Why is that not a federal position?

Schneiderman: I think that the term really became popular back when Eliot Spitzer was the A.G. and we’re in an era where, during the Bush administration, a lot of the federal agencies were slow to please Wall Street.

And I think that he sort of filled that gap, and that’s where the reputation and the nickname came out. And our goal is to make sure that people have confidence that markets are legitimate, and there’s one set of rules for everyone, and that if something’s rated AAA, that means something.

Hobson: Well if you’re the “Sheriff of Wall Street,” have the people that you’ve policed cleaned up their act since a few years ago?

Schneiderman: There have been some changes. I think there have been difficulties in implementing the new laws that have been passed by Congress, but there’s a lot of progress that’s been made.

But we view our investigation as a part of an overall effort to restore the public confidence that is so critical to the functioning of the markets, and frankly that’s so critical to the functioning of our democracy.

Hobson: Your office looks out over Zuccotti Park and the Occupy Wall Street protesters. What do you make of that movement?

Schneiderman: I think that when you cut through some of the more flamboyant stuff that gets a lot of media attention, what I hear from Occupy Wall Street and the other Occupy movements is really the same thing I hear from most Americans.

At the bottom, it’s the idea that they’re demanding accountability; they have a sense that the banks got bailed out, we’re holding the bill and no one was held accountable. And they really want to restore the sense that there’s one set of rules for everybody. This is a big part of restoring confidence in America. And I see the Occupy movement as just the more visible tip of a big iceberg.

Hobson: Attorney General Eric Schneiderman, thank you so much.

Schneiderman: Thank you.

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