Will Senate GOP Bend To Big Banks? (Updated)
As this session comes down to the wire, the Legislature has yet to take action on a priority of AG Eric Schneiderman’s office: The Foreclosure Fraud Prevention Act of 2012.
Schneiderman, as you’ll recall, was tapped by President Obama in January to head a new task force to investigate frauds involving home loans and mortgage-backed securities. (This has turned out to be just as much of a curse as a blessing for the AG, but we won’t debate that here).
Earlier this month, Schneiderman introduced legislation to crack down on fraudulent mortgage practices, such as “robosigning” of loans. The act defines “residential mortgage foreclosure fraud” and imposes criminal penalties - including jail for violators. (Remember: The fact that no one is behind bars as a result of the Wall Street meltdown caused by the mortgage crisis is a big sticking point for the Occupy set).
The AG’s proposal makes foreclosure abuse a Class A misdemeanor, punishable by up to a year in jail and a $1,000 fine, and targets any an employee or “agent” of a residential mortgage business who knowingly authorized, prepared, executed or offered to file false documents in a pending or prospective residential foreclosure action.
In addition, multiple acts of foreclosure fraud would be a Class E felony, punishable by up to four years in state prison. Any “high managerial agent” of a residential mortgage business who “recklessly” tolerates fraud by his or her employees or agents would also be charged with a Class E felony.
The act is sponsored by Assemblywoman Helene Weinstein, a Brooklyn Democrat, and is on the move in the lower house. It was passed by the Codes Committee, is in the Rules Committee - the last stop before the floor – and has a good shot at passage by the entire Assembly before lawmakers leave tomorrow, according to the AG’s office.
UPDATE: The act has been voted out of Rules and is scheduled for a full vote in the Assembly some time tomorrow.
The Senate – of which Schneiderman was a member before he took his current statewide post in January 2011 – is another story.
Even though it has 32 co-sponors – Republicans, Democrats and all four IDCers – and is being carried by Hudson Valley Republican Sen. Steve Saland, (who has a primary challenge, thanks to his “yes” vote on same-sex marriage last summer), the AG’s act hasn’t budged on that side of the Capitol, and the banks are mobilizing in an effort to make sure it stays bottled up through the end of session.
The New York Bankers Association’s memo of opposition appears below.
Not surprisingly, the act is endorsed by a whole host of progressive/liberal entities, including some powerhouse unions like SEIU 1199 and HTC, whose decisions in the upcoming elections could be crucial to the GOP’s effort to retain the majority.
(I’m not saying these unions will endorse any Republicans outright, although 1199, for example, has certainly done so in the past. It’s more a question of who they do or don’t back on the Democratic side of the aisle, and how hard they work on those candidates behalf).
This issue is sort of a sticky political wicket for the Republicans – especially the delegation from Long Island, which has one of the highest foreclosure rates in the state. According to the AG, the foreclosure rate increased last year by 50 percent in Suffolk County and 34 percent in Nassau County.
|Print article||This entry was posted by Liz Benjamin on June 20, 2012 at 1:25 pm, and is filed under Eric Schneiderman, Labor, Republicans, State Senate, Uncategorized. Follow any responses to this post through RSS 2.0. Both comments and pings are currently closed.|
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