The Intriguing Politics Behind California's New Assault On The Banks

gavin newsome

Photo: ap

The latest big headache for the banks: California AG Kamala Harris has pulled out of 50-state talks to come up with a settlement to foreclosure-gate/robo-signing issues.This probably kills the whole idea of a national settlement, since a) more states will likely drop out of the talks and b) banks aren’t going to be eager to make a big settlement that doesn’t ultimately make them immune from more legal liability.

David Dayen over at FireDogLake notes an interesting development: foreclosure fraud has become a big, salient political issue. Earlier yesterday, Gavin Newsom — who is a potential rival to Harris for the state’s governorship in 2014 — sent a letter demanding that she not accept a “bad deal” on foreclosures.

What’s more notes Dayen, Harris previously has been a big political ally of Obama, who by all accounts wants to get this bank issue settled.

So the bottom line: All around the country, it’s good politics to hold the banks’ feet to the fire. And of course, that’s just more bad news for the banks themselves.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.