Sweetheart deal on bank fraud would give Obama 'zero credibility' to run against Wall Street

A couple of weeks ago, Treasury Secretary Timothy Geithner said that "dramatic enforcement actions" against Wall Street would be coming, only to be greeted with skepticism.

That reaction turned out to be pretty well-founded last week, when details of the foreclosure fraud settlement the administration has been negotiating emerged.

Cutting to the chase: if you thought this was the deal that would hold banks accountable for filing phony documents in courts, foreclosing without showing they had the legal right to do so and generally running roughshod over anyone who opposed them, you are likely to be disappointed.

This may not qualify as a shock. Accountability has been mostly A.W.O.L. in the aftermath of the 2008 financial crisis. A handful of state attorneys general became so troubled by the direction this deal was taking that they dropped out of the talks. Officials from Delaware, New York, Massachusetts and Nevada feared that the settlement would preclude further investigations, and would wind up being a gift to the banks.

It looks as if they were right to worry. As things stand, the settlement, said to total about $25 billion, would cost banks very little in actual cash—$3.5 billion to $5 billion. A dozen or so financial companies would contribute that money.

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