WASHINGTON — The attorneys general from Tennessee and Georgia are in the nation’s capital this week collaborating with their counterparts from across the country, exchanging ideas with Justice Department officials, and hearing an earful from angry citizens.
As the conference got under way a group of sign-waving protesters crowded outside the downtown hotel where the AG’s are meeting, demanding criminal charges be brought against bankers who helped fan the subprime mortgage crisis.
Attorneys general from all 50 states are collectively investigating banks over their subprime lending practices, but they haven’t announced any plans to criminally prosecute bankers.
“We want to tell the attorneys general that they got to go toe to toe with the big banks; they got to stand up to the big banks,” said Hugh Espy, executive director of Iowa Citizens for Community Improvement.
Some of the protesters said their homes were foreclosed after banks jacked up their monthly payments without warning or locked them into loans they could never afford.
Some reports have leaked that AGs are offering the banks a settlement of $20 billion. Members of the crowd said that amount is too low, and the AGs refused to comment on the report.
“Obviously there are a lot of people frustrated about the situation in the housing market. It continues to be a problem,” said Tennessee’s top prosecutor, Robert E. Cooper Jr.
He said he’s committed to investigating wrongdoing by the nation’s largest financial firms, but he wouldn’t say if he thought criminal charges were warranted.
In the wake of the economic slump, Cooper said one of the most important areas where his office is working with federal officials is on financial fraud.
“Because of the financial downturn we’ve seen more of that,” he said. “Ponzi schemes rely on good times to keep going and when the economy takes a downturn, then those tend to get exposed.”
It’s a different case in Georgia. In 2007 the state passed its first law dealing with false claims but it’s limited to Medicaid fraud.
“Frankly I’d like the fair claims act to be broader in scope to give us the necessary tools to assist the consumers,” said the state’s new attorney general, Sam Olens.
He said some members of the Legislature are trying to revise that bill, though he doesn’t think his jurisdiction will be expanded until 2012 at the earliest.
Contact freelance reporter Matt Laslo at 202-510-4331 or email@example.com. Follow him on Twitter: http://twitter.com/MattLaslo.