Senator Kamala Harris, Democrat of California, yesterday announced her intent to pursue nomination as the Democratic Party’s candidate for president of the United States. Senator Harris is renowned for going up against five major mortgage banks obtaining a national $25 billion foreclosure settlement while serving as California state attorney general in 2012. According to The Los Angeles Times, California homeowners received approximately $9.2 billion in first and second mortgage relief amounting to 84,102 California families receiving reductions in their first or second mortgages.
Analysts argue that because a large portion of the loans that were forgiven were delinquent, banks were not going to recover their lost investment. Either through short sales or reduction in monthly mortgage bills, California homeowners came away with the benefit of reduced financial stress.
One of the criticisms of Ms. Harris’ deal was that bankers in California did not see jail time for issuing predatory loans. Another criticism concerned determining if the benefit of the settlement was being spread fairly among ethnic groups. According to the Los Angeles Times with no adequate tracking of the benefits dispersed from the settlement, it was hard to tell whether low-income or black American borrowers partook equitably in the settlement.
Another likely criticism may be Ms. Harris’ inability to prevent then governor Jerry Brown from reportedly diverting proceeds from the settlement toward other areas of the budget.
A review of Ms. Harris’ campaign website lists no specific policy statements on banks or the financial services industry as a whole with the exception of her foreclosure settlement negotiations. On her Senate website she did express opposition to the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, referring to the proposed bill as an attempt to roll back consumer protections instituted after the 2008 financial crisis. The bill eventually became law on 24 May 2018.
A review of the American Bankers Association’s website found that no press statements have been released regarding the ABA’s position on Ms. Harris’ announcement.
I cannot conclude that Senator Harris’ relationship with the banks is negative, aggressive, or acrimonious. I cannot conclude that it is warm either. Senator Harris’ pledge not accept donations from corporate political action committees may not prohibit banks or their employees, however, from donating to non-corporate PACs.