Oklahoma was the cheese that stood alone in the $25 billion mortgage banking shakedown by the federal government earlier this year. Attorney General Scott Pruitt declined to participate in a settlement based on alleged unfair and deceptive practices by mortgage bankers. The other 49 states climbed aboard Uncle Sam's settlement bandwagon.
Pruitt did his own deal, negotiating an $18.6 million settlement for Oklahomans wronged by the industry. Widely criticized for his refusal to join the other states, the AG made a courageous, risky choice. The state's own fund has the potential of being more efficient and less bureaucratic while paying out more to those who were actually wronged.
With a Sept. 13 deadline looming for applications to the fund, not many Oklahomans are taking advantage of it. The Tulsa World reported that only 173 applicants are in hand as the deadline nears.
This could mean that relatively few Oklahomans have legitimate claims. Some of them are seeking redress through federal programs available to them. But the numbers put Pruitt's restraint in marked contrast to the Obama administration's crowing about the extent of the problem.
At the time of the settlement announcement in February, The Wall Street Journal wrote, “The politicized lending that led to the housing crisis has turned into politicized settlements, which will in turn lead to more politicized lending.” Much the same could be said about federal health care policy and Obama's reform law. However much the mortgage settlement helps politicians, the Journal opined, “it won't revive the housing market.”
The feds pursued a housing policy that went south; the federal government then came to the rescue. States were asked to sign on. All but Oklahoma did. For that, Pruitt was excoriated. The Republican is no fan of the Obama administration and his motives likely included a political element.
But that cuts both ways. If his decision leaves Oklahomans in the lurch, it will hurt him politically. So far, though, Pruitt's decision seems far more prudent than political.