×

First on CNBC: CNBC Transcript: NY Attorney General Eric Schneiderman Speaks with CNBC’s “Closing Bell” Today

WHEN: Today, Monday, April 11th

WHERE: CNBC's "Closing Bell"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with New York Attorney General Eric Schneiderman on CNBC's "Closing Bell" (M-F, 3PM-5PM ET) today, Monday, April 11thdiscussing Goldman Sach's $5B mortgage settlement. Following is a link to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000508730.

All references must be sourced to CNBC.

KELLY EVANS: THE US DEPARTMENT OF JUSTICE ANNOUNCING TODAY THAT GOLDMAN SACHS AGREED TO PAY JUST OVER $5 BILLION TO SETTLE CLAIMS STEMMING FROM THE MORTGAGE CRISIS. NY ATTORNEY GENERAL ERIC SCHNEIDERMAN IS THE CO-CHAIR OF THE RESIDENTIAL MORTGAGE BACKED SECURITIES WORKING GROUP WHICH NEGOTIATED THE SETTLEMENT WITH GOLDMAN AND JOINS US ONSET.

ERIC SCHNEIDERMAN: THANKS FOR HAVING ME.

EVANS: DOES THIS END YOUR OUTSTANDING LITIGATION WITH GOLDMAN ON FINANCIAL CRISIS ERA STUFF?

SCHNEIDERMAN: THIS RESOLVES CLAIMS RELATED TO THE BAD MORTGAGE BACKED SECURITIES THAT WERE PART OF BRINGING THE MARKET DOWN IN 2008. THIS RESOLVES CLAIMS BY A VARIETY OF FEDERAL AGENCIES AND STATES.

EVANS: WHAT ABOUT THE OTHER BANKS?

SCHNEIDERMAN: WE'VE SETTLED SO FAR WITH CHASE, MORGAN STANLEY, BANK OF AMERICA, CITI, GOLDMAN IS THE FIFTH. THERE'S STILL MORE INVESTIGATIONS UNDER WAY BUT THIS BRINGS THE TOTAL FOR OUR WORKING GROUP TO OVER $90 BILLION RECOVERED AND NEW YORK STATE HAS RECOVERED I'M HAPPY TO SAY OVER $5 BILLION AND WE'RE DOING WHAT WE CAN DO TO SEE AS MUCH AS THIS GETS OUT TO HOMEOWNERS OR COMMUNITIES THAT WERE HURT BY THE CRASH AS POSSIBLE.

EVANS: THAT'S EXACTLY THE QUESTION, WHETHER IT'S BEEN TALLIES OF DIFFERENT ANALYSTS FOLLOWING THE BANKS, SAYING UPWARDS OF $200 BILLION THAT HAVE BEEN EXTRACTED IN FINES AND SETTLEMENTS SINCE THE CRISIS OR THE JOURNAL'S INVESTIGATION A MONTH OR SO AGOWHERE THEIR SIMPLE QUESTION WAS WHERE'S THIS MONEY GOING. THEY COULD FIND OF FIGURE IT OUT BUT COULDN'T REALLY. EVEN IN NEW YORK'S CASE, IT MIGHT BE GOING TO PAY SOME PENSIONS OR WHAT HAVE YOU. WHERE IS ALL THIS MONEY GOING?

SCHNEIDERMAN: THE SETTLEMENTS ARE COMPLICATED BECAUSE DIFFERENT BANKS HAD DIFFERENT CLAIMS SOME HAD NATIONAL, THE CREDIT UNION ASSOCIATION HAD CLAIMS IN SOME CASES IT WAS DIFFERENT AGENCIES , SOME STATES THEY HAD PENSION FUND CLAIMS. IN THE STATE OF NEW YORK WE'VE GOTTEN WELL OVER A BILLION DOLLARS IN CASH. THAT'S GOES TO THE STATE GENERAL FUND. TO THE EXTENT IT'S INTENDED TO BE DIRECTED TOWARDS HOUSING PROGRAMS WHEN WE HAVE SUBSTANTIAL HOUSING PROGRAMS IN NEW YORK STATE BUT THAT'S REALLY CARVED UP BY THE LEGISLATURE AND THE GOVERNOR. THE SOFTER LEAF AS THEY CALL IT THE CONSUMER RELIEF HAS BEEN DIRECTED IN NEW YORK PRIMARILY TO HELPING HOMEOWNERS AND COMMUNITIES THAT WERE HURT BY THE CRASH. THE FIRST THING WE DID WAS FUND A NETWORK OF 90 HOUSING COUNSELING AND LEGAL SERVICES AGENCIES SO NO ONE IN NEW YORK GETS FORECLOSED ON BECAUSE YOU CAN'T GET TO A LAWYER. THERE ARE A LOT OF FOLKS OUT THERE WHO ARE ELIGIBLE FOR MODIFICATIONS THEY CAN KEEP YOU IN YOUR HOME BUT THEY JUST DIDN'T KNOW IT. WE'VE SEEN THROUGH THAT NETWORK OVER 60,000 FAMILIES ALREADY AND HELPS A LOT OF FOLKS KEEP THEIR HOMES.

EVANS: AND WE KNOW THESE ARE HUGE SUMS BUT GOLDMAN DID RALLY ON THE NEWS. HOPING AS YOU INDICATED AS WELL THIS NOW PUTS THAT CHAPTER BEHIND THEM.

MIKE SANTOLI: RIGHT THAT'S THE SENSE, AT LEAST IF NOT THE LAST ONE THAT WE'RE AT THE TAIL END OF THIS WHOLE PROCESS. I WONDER, THE SUBSTANCE OF THE FINDINGS WERE THAT GOLDMAN AND OTHER BANKS AS WELL MISREPRESENTED THE QUALITY OF THE LOANS THAT WERE BACKING THESE SECURITIES. WHAT ON A GOING AHEAD BASIS WILL CHANGE. IS THERE ANYTHING REQUIRED OF THE BANKS TO CHANGE PRACTICES OR MAKE SURE THAT THINGS DON'T HAPPEN THIS WAY AGAIN?

SCHNEIDERMAN: THERE'S MONITORING ON AN ONGOING BASIS TO MAKE SURE THE MONEY BEING DISTRIBUTED IS DISTRIBUTED PROPERLY FOR EXAMPLE IF IT IS GETTING TO FORECLOSURE RELIEF OR BLAND BANKS WHICH WE'RE ALSO FUNDING IN NEW YORK. GOING FORWARD, THEY HAVE TO COMPLY WITH SECURITIES LAWS. SOME PEOPLE ARE ARGUING THAT THE MORTGAGE MARKET IN THE WAKE OF THIS TIGHTEN UP TOO MUCH. NOW WE'RE TRYING TO REACH THE RIGHT BALANCE. EVERYONE IS ON NOTICE. THE PROBLEM HERE ESSENTIALLY WAS MISREPRESENTATIONS ABOUT DUE DILIGENCE THERE WERE ALL OF THESE PROMISES, WE'RE SCRUTINIZING THESE LOANS CAREFULLY AND MAKING SURE WE THROW OUT THE BAD ONES. GOLDMAN FOR WHATEVER REASON DID BUSINESS WITH COUNTRYWIDE AND FREEMONT A LOT OF THE WORST ACTORS IN THIS AREA AND WAIVE IN A LOT OF LOANS, THEIR OWN PEOPLE SAID THEY PROBABLY SHOULDN'T WAVE THEM IN AND THEY WAVED THEM IN SO THAT IS ALL IN THE STATEMENT OF FACTS.

LINK: DO YOU THINK THE REGULATIONS ARE TOO TIGHT NOW?

SCHNEIDERMAN: NO, I DON'T THINK THE REGULATIONS ARE TOO TIGHT. I THINK THAT THERE'S CHALLENGES WITH THE HOUSING MARKET AND FINDING THE RIGHT BALANCE IS ALWAYS TOUGH. AND WE WENT THROUGH A PERIOD OF TIME WHERE THERE WAS THIS HUGE PUSH FOR HOMEOWNERSHIP, PARTICULARLY MINORITY HOMEOWNERSHIP. AND A LOT OF FOLKS SAY, YOU KNOW, WOULD ARGUE THAT THERE WERE PEOPLE WITH GOOD – WELL INTENTIONED WHO THOUGHT THIS WAS A GOOD WAY TO GET FAMILIES TO SECURE SOME WEALTH FOR THEMSELVES AND THEIR CHILDREN. AND ENDED UP PUTTING A LOT OF EQUITY IN THEIR HOMES JUST IN TIME FOR THE CRASH. SO YOU'VE GOT TO FIND THE RIGHT BALANCE.

EVANS: THERE'S ALSO, OBVIOUSLY A BIG FOCUS ON CAMPAIGN TRAIL ABOUT THE FINANCIAL CRISIS STILL AND WHETHER THE BANKS ARE TOO BIG AND NEED TO BE BROKEN UP AND THESE KIND OF THINGS. AND THIS IS NOW HERE IN NEW YORK, ESPECIALLY WITH THOSE PRIMARIES COMING UP. ARE YOU ENDORSING SOMEBODY? HAVE YOU DECLARED YOURSELF FOR SOMEBODY?

SCHNEIDERMAN: OH, I ENDORSED SECRETARY CLINTON A LONG TIME AGO. WE HAVE LONG RELATIONSHIP GOING BACK TO, ACTUALLY, BEFORE SHE WAS A SENATOR FROM NEW YORK. BUT I'VE WORKED WITH HER, TALKED PUBLIC POLICY WITH HER –

EVANS: LET ME JUST ASK YOU THEN, DO YOU THINK THAT BERNIE SANDERS HAS GONE TOO FAR WITH HIS RHETORIC? I MEAN, YOU HERE, REPRESENT KIND OF THE HAMMER COMING DOWN ON THESE INSTITUTION. BUT HE STILL WILL SAY THE BUSINESS MODEL OF WALL STREET IS FRAUD. IS HE GOING TOO FAR? OR NEEL KASHKARI, YOU KNOW, WHEN YOU HEAR THE BANKS ARE – TIME TO BREAK UP THE BANKS. ARE THEY FOCUSED ON THE RIGHT THING HERE?

SCHNEIDERMAN: YEAH, I MEAN, I'M NOT FOLLOWING EVERYTHING SENATOR SANDERS SAYS. HE'S A NICE FELLOW, BUT I THINK THE HARSH RHETORIC IS ONE THING. COMING UP WITH SOLUTIONS IS SOMETHING ELSE AGAIN. AND WE ARE IN A PERIOD OF TIME WHERE I WOULD ARGUE THAT WE DO NOT – HAVE NOT HAD EFFECTIVE REREGULATION. I DON'T THINK THE DODD FRANK PROCESS IS GOING AS WELL AS IT SHOULD. IT IS MAKING THINGS COMPLICATED THAT SHOULD BE MADE MORE SIMPLE. AND I DO THINK THAT IT WOULD BE GOOD FOR WHOEVER THE NEXT PRESIDENT IS TO TAKE A CAREFUL LOOK AT THAT PROCESS. AND MY APPROACH TO IT IS YOU REALLY GOT TO GET PEOPLE INVOLVED WHO ARE IN THE BUSINESS. YOU'VE GOT TO GET PEOPLE INVOLVED WHO UNDERSTAND THE INDUSTRY, WHO UNDERSTAND FINANCES. COMPLEXITY IS THE ENEMY OF THE SIMPLE INVESTOR.

EVANS: NO, EVERYBODY WOULD AGREE TO THAT. BUT WOULD YOU GO SO – WOULD YOU EVER FILE SUIT AGAINST THESE BANKS TO BREAK THEM UP? YOU KNOW, WHAT I MEAN? IS THERE A BASIS FOR GOING THAT FAR IF YOU FEEL AS THOUGH THERE'S STILL – IS THAT ONE SOLUTION? I MEAN WOULD THAT GET WHAT YOU ARE TALKING ABOUT?

SCHNEIDERMAN: ACTUALLY UNDER DODD FRANK IT'S ARGUABLY HARDER TO BECAUSE IF YOU'RE A SIFI WHERE YOU'RE BEING – THE GOVERNMENT IS NOW BLESSING TOO BIG TO FAIL. SO IN A STRANGE WAY, WE'VE MOVED IN THE OPPOSITE DIRECTION OF WHAT A LOT OF ADVOCATES FOR FINANCIAL REFORM WERE SEEKING. I THINK – THE MARKETS I THINK ARE CERTAINLY BETTER OFF THAN WE WERE LEADING UP TO THE CRASH. WE WERE ALWAYS IN DANGER OF OTHER BUBBLES, BUT I HAVE A PRETTY GOOD SENSE THAT THERE ARE SMART PEOPLE TRYING TO DO THE BEST THEY CAN. IT IS BOGGED DOWN BY THIS MORASS OF GRIDLOCK AND LOBBYISTS ON TOP OF LOBBYISTS IN WASHINGTON. THE PROBLEM WE'VE GOT RIGHT NOW IS THAT THE FEDERAL GOVERNMENT IS JUST NOT FUNCTIONING AT THE LEVEL WE NEED IT TO FUNCTION. AND THAT'S WHY MY OFFICE AND I'M PROUD OF THE FACT THAT WE TOOK THE LEAD OF ALL THE STATES IN GETTING THIS WORKING GROUP SET UP IN THE FIRST PLACE SO WE COULD RECOVER –

EVANS: NO, YOU GUYS HAVE – WHETHER IT'S THIS, TRUMP UNIVERSITY, DAILY FANTASY, YOU GUYS HAVE YOUR HANDS FULL. SO WE'LL LET YOU GO AND GET BACK TO WORK.

SCHNEIDERMAN: THANK YOU.

EVANS: THANK YOU FOR JOINING US DOWN HERE TODAY.

SCHNEIDERMAN: APPRECIATE IT.

About CNBC:

With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, CNBC World and CNBC HD , CNBC is the recognized world leader in business news and provides real-time financial market coverage and business information to approximately 371 million homes worldwide, including more than 100 million households in the United States and Canada. CNBC also provides daily business updates to 400 million households across China. The network's 15 live hours a day of business programming in North America (weekdays from 4:00 a.m. - 7:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night features a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries.

CNBC also has a vast portfolio of digital products which deliver real-time financial market news and information across a variety of platforms. These include CNBC.com, the online destination for global business; CNBC PRO, the premium, integrated desktop/mobile service that provides real-time global market data and live access to CNBC global programming; and a suite of CNBC Mobile products including the CNBC Real-Time iPhone and iPad Apps.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://www.nbcumv.com/mediavillage/networks/cnbc/.