Statement by AFL-CIO President Richard L. Trumka on Possible Bank Mortgage and Foreclosure Fraud Settlement

For Immediate Release

Contact: 

Jeff Hauser (202)  637-5018

Statement by AFL-CIO President Richard L. Trumka on Possible Bank Mortgage and Foreclosure Fraud Settlement

WASHINGTON - We need to hold banks accountable for the fraudulent practices that brought about the worst economic crisis since the Depression.  State Attorneys General have been investigating bank fraud, and these critical investigations must not be undermined by a premature and inadequate settlement.  We call on the administration to reject any deal that insulates banks from full responsibility.

It is critical that the Department of Justice lead a comprehensive investigation together with the state Attorneys General to prevent banks from engaging in future unlawful and deceptive practices that could exploit homeowners and put the economy further at risk.

We commend state Attorneys General like New York's Eric Schneiderman and Delaware's Beau Biden for their leadership and courage in calling for a real investigation and relief on a scale that helps the millions of homeowners who face a new wave of foreclosures.       

The economy is currently weighed down by $750 billion in negative home equity, so relief on a massive scale is needed to lift home values and stimulate the economy by increasing consumer demand. A comprehensive settlement must force banks to write down underwater mortgages. A sum significantly larger than the rumored $25 billion is needed for the economy to grow and create jobs. 

Specifically, the administration must stand strong against the big banks and insist on:  

1) A full and thorough investigation into problems tied to the residential mortgage-backed securities (RMBS) market, and 

 2) A guaranteed minimum amount of money set aside for reducing the mortgage principal of "underwater" homeowners in key states impacted by the foreclosure crisis. 

This is an opportunity for the administration to demonstrate leadership and show that it has the political will to do what's right for homeowners and right for our economy. 

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The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is a voluntary federation of 56 national and international labor unions. The AFL-CIO union movement represents 10.5 million members, including 2 million members in Working America, its new community affiliate. We are teachers and truck drivers, musicians and miners, firefighters and farm workers, bakers and bottlers, engineers and editors, pilots and public employees, doctors and nurses, painters and laborers-and more.

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