We’ve commented previously on Tom Miller as the contemporary exemplar of what in the 1960s was called a credibility gap. Readers no doubt know that he is the lead negotiator on behalf of the state attorneys general in what was formerly called the 50 state attorney general [mortgage] settlement. (Notice separately how the state AGs are providing cover for several Federal banking regulators, HUD and the Department of Justice, which are also parties to this deal).
A partial recap: Miller started by promising criminal prosecutions, then reneged. He has refused to do investigations, then had the temerity to try to claim they took place). He said there would not be a big waiver on mortgage liability, when as we discussed, that was the only thing Miller & Co. could offer that would get a deal to the numbers he had unwisely committed himself to (north of $20 billion). And several state attorneys general have walked from the deal precisely because they object to the plan in motion: a big release for an impressive-sounding number, when they have an inadequate idea of how much questionable activity is being forgiven.
But the truly absurd part is the continued pretense by Miller that a deal will get done. He’s been saying every few weeks that a deal is weeks away for over a year. In early August, a deal was supposed to be inked by Labor Day. Earlier this month, Miller said a deal would be done by Christmas.
Today we learn (quelle surprise!) that there will be no pact in Santa’s bag. But even more telling, as far as Miller’s veracity is concerned, is another revelation in the report from National Mortgage News. Note that this piece can be characterized as optimistic (or clueless). It keeps up the party line that California attorney general Kamala Harris might rejoin the talks. While she is perceived to be more opportunistic than most state prosecutors, she has been moving further and further away from the settlements. She has teamed up with the most aggressive attorney general, Catherine Masto of Nevada, to investigate mortgage abuses.
So look at the little revelation towards the end of the article:
But a new wrinkle emerged last week when reports surfaced that the banks were also seeking assurances from the Consumer Financial Protection Bureau that it would release them from liability related to mortgage origination.
The agency dropped out of any talks on the settlement in the spring, after documents revealed that CFPB officials had spoken with state officials about the settlement. The industry accused Elizabeth Warren and the bureau of meddling in the negotiations — they suggested it was CFPB that proposed the initial $20 billion settlement amount — and Republicans blasted it for acting without any legal authority. Warren insisted that she merely gave advice to the state AGs when asked.
Since then, the CFPB has not been involved in any settlement negotiations, save for an occasional briefing from federal officials.
So get this: we don’t have a deal and the teeny odds of getting one done keep shrinking. The biggest items to be negotiated, the release (this deal is scope of release v. cash, the rest is decoration) is still unresolved (as in the two sides are really far apart, as confirmed by how long this charade has continued). AGs have walked over the concessions Miller made. And the banks keep upping their demands. The bank strategy is negotiating in bad faith, and even talks that are faring well will start coming apart with that sort of conduct.
News leaks on the settlement talks continue confirms that when Miller conveys information to the press, you are more likely to be right if you assume what he says to be untrue.