Bank Settlement Gets Mixed Support

While the deadline for the proposed $25 billion settlement with the nation’s largest banks over their roles in the economic crisis hits at the close of business today, some of the biggest state players, including California and New York, have yet to officially come on board for the deal, according to the Washington Post, a move that will significantly reduce its value. The settlement, hammered out over the past year amid allegations of shady foreclosure practices, would go toward loan write-downs, refinancing and other assistance, funded by Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co., according to the Wall Street Journal.

However, this would come at the cost of also protecting banks from legal claims tied to foreclosures, mortgage-servicing and origination of loans, a condition that some attorneys general, mired in their own investigations into the financial crisis, have found unacceptable, continued the Washington Post. It would also require states that currently in the middle of litigation against the banks over their actions during the crisis to drop their suits, continued the Washington Post.