N.Y. budget blocks NY A.G. from controlling JP Morgan settlement cash: NY AG loses $440M in housing funds under state budget

Bloomberg:

The budget deal reached by Governor Andrew Cuomo and lawmakers would require New York’s attorney general to cede control of cash obtained from settlements to the governor and legislature.

The move would cap a fight between Cuomo and Attorney General Eric Schneiderman, a fellow Democrat, over New York’s $613 million share of a $13 billion federal-state settlement withJPMorgan Chase & Co. (JPM) That November accord ended probes into the bank’s mortgage-bond practices and put the funds under Schneiderman’s supervision.

The provision, along with the rest of the $137.9 billion spending plan, is expected to be voted on in Albany today ahead of a deadline on April 1, the start of the fiscal year.

“Our concern has always been that the funds from Attorney General Schneiderman’s settlement with JPMorgan Chase be used for the purposes for which they were intended — to help struggling homeowners in New York,” said Damien LaVera, a spokesman for Schneiderman, in an e-mail. “We will review the budget proposal through that lens.”

During the dispute with the attorney general, Cuomo aides said the state constitution already required settlement cash to be deposited in the treasury, which the governor and legislature control.

Unfortunately, Schneiderman loses $440M in housing funds under the state budget. From NY Daily News:

Tucked away in the budget bills is a provision that strips Schneiderman of his control of the remaining $440 million the state will get in a national housing settlement with JP Morgan Chase.

Instead, the money will be put in a new fund and controlled jointly by Gov. Cuomo and legislative leaders. The bills say the money must be spent on multiple housing issues, including anti-blight projects, foreclosure assistance hotlines and counseling and mediation programs.

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