NY, CA Bow Out of Bank Settlements

State attorneys general from 40 different states have accepted the terms of a $25 billion settlement from the nation’s largest banks over their role in the financial crisis, though New York and California, who have been seen as key players in the deal, have not, according to the Los Angeles Times, though this does not prevent them from signing on later. The settlement, arrived at through months of negotiations between the federal government, state attorneys general and the banks, is intended to go toward relief for homeowners and former homeowners who lost their house to foreclosure, according to ABC News.

The settlement itself was made in response to the practice known as “robo signing” where banks would sign off on foreclosures often without even having anyone read or checked the documents, a situation that, as of this past July, was still said to be endemic in the banking industry, according to Reuters. The five banks that were implicated in this scandal, and are offering to pay the settlement, include Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc., continued the Los Angeles Times.

While most states have agreed to the settlement, others, including New York, California, Nevada and Delaware, are still holding out, according to Bloomberg. While New York Attorney General Eric Schneiderman has declined to comment on why he did not join in the settlement, it may have something to do with the fact that Bank of America, JP Morgan and Wells Fargo have demanded that New York drop pending claims against them as part of the settlement, continued Bloomberg. Schneiderman has also criticized the settlement in the past as being too lenient on the banks, and reserved particular ire for a provision that would also shield the banks from future claims against them, according to the New York Times.