Iowa AG: Banks may face criminal liability after robo-signing settlement
The eventual robo-signing settlement between the 50 state attorneys general and major mortgage servicers will not release these firms from all criminal or civil actions, according to Iowa AG Tom Miller. Rep. Jerrold Nadler (D-N.Y.) and 20 members of the New York congressional delegation sent a letter to Miller Wednesday, chiding him for allegedly ousting New York AG Eric Schneiderman from the talks. "We are deeply troubled by your recent action to silence New York’s voice by removing New York State Attorney General Eric Schneiderman from an executive committee negotiating a nationwide settlement with the banks," Nadler wrote. Miller responded in a letter Friday, saying Schneiderman left the negotiation committee in June, then worked to undermine Miller and the other AGs as they tried to reach a deal. Schneiderman isn't alone in criticizing the still-forming deal. Massachusetts AG Martha Coakley recently said she would not sign on to any deal that would release the banks from liability for the Mortgage Electronic Registry Systems practices. AGs from Delaware and Nevada along with Schneiderman believed the negotiations were beginning to free the banks up from too much liability. Meanwhile, Republican AGs have criticized Miller and his committee from taking the investigation beyond the allowable jurisdiction of their offices. "While a final multistate case release has not been negotiated and the release is a work in progress, attorneys general on the negotiation committee are not preparing to, nor will they agree to, release the banks from all civil liability," Miller wrote in his letter to Nadler. "We are also not preparing to, nor can we agree to, release the banks from any criminal liability." The letter signaled Miller would be leaving it up to each AG whether they want to sign onto the agreement, whenever it comes. It's been nearly one full year since the AGs launched the investigation when evidence of forged foreclosure documents began to emerge last year. Schneiderman said he wants to take the investigation further, to pursue the banks for mishandling securitization documents as well. Miller said Schneiderman is not the only AG who shares this view. He added the final settlement will be as narrow as possible. "Let's assume that Attorney General Schneiderman deems the final release as too broad in some manner," Miller wrote. "The remedy for this is simple: all Mr. Schneiderman has to do is decline to sign on to the settlement." Write to Jon Prior. Follow him on Twitter @JonAPrior.