Bank of America Uses Attack Dog to Smear NY AG Schneiderman

So having figured out that the Feds cannot come riding to the rescue with another back-door bailout, Bank of America has settled on Plan B. They’ve decided to smear the AGs who are doing their job.

And they’re doing it in a very roundabout way. They’ve trotted out Kathryn Wylde, the President of the Partnership for New York City, to attack Eric Schneiderman for his intervention in the Bank of America settlement with investors over mortgage backed securities. Wylde is going to bat for BofA as well as the Bank of New York Mellon, the trustee for the MBS in the settlement. And she is actually arguing that Schneiderman, by defending the rights of investors and seeking the truth on out and out securitization fraud, is threatening the existence of the financial sector in New York City. No, really.

A BNY Mellon spokesman told me the bank didn’t want to comment on the broader implications of the AG’s filing, but directed me to Kathryn Wylde, CEO of the Partnership for New York City, a business development non-profit. She said that the AG’s “careless action” hurts New York’s standing as a financial center.

“It’s disappointing from the standpoint of the business community that the AG would make a fraud accusation against a major financial institution — in the press,” she told me. “And to not have any consultation with the institution? The bank was blindsided by what appears to be an outrageous charge.” (The AG’s press office didn’t respond to my request of comment.)

BNYM DIRECTED the reporter to Wylde, incidentally. Wylde has done this before, back in November 2009, arguing that breaking up big banks would hurt New York City. This would be outrageous enough on its own. But Wylde happens to sit on the board of directors for the New York Federal Reserve (sub. reqd.)…

There’s almost no way this is not coordinated. Wylde is pretty powerful in New York circles, I understand, and she’s raising fears of a slowdown to New York City’s main economic engine to stall regulatory oversight. The banks must continue looting, the story goes, or they’ll stop creating jobs in Manhattan. I don’t think Schneiderman is likely to fold under this attempt at pressure, especially because the evidence keeps moving in his favor, rather than the other way.

Check out David’s post in full here…

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