“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way--in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”

Charles Dickens, A Tale of Two Cities

Public opinion matters a great deal in the American system of government, just as it does in any democracy. But it sure isn’t the only thing that matters, as the following true story demonstrates. It’s what I call A Tale Of Two Constituencies.

Before I get deeper into my tale, though, my reader should know that in the land this tale comes from, the President had been elected and re-elected on not only a progressive platform, but arguably with the most populist rhetoric in 40 years. He had run his campaigns on fighting for the middle class, protecting the vulnerable from harm, taxing the wealthy, and taking on the wealthy special interests who were harming our economy. His re-election campaign had bragged about taking on Wall Street, and harshly criticized the vulture capitalist business practices of his opponent. And because of running these kinds of campaign, this President won 2 decisive victories in a row, becoming the first President of his center-left party to win a clear majority of the votes more than once since the 1930s.

So that gives you a sense of the kind of land this was, and the kind of President they had. Now for my tale. You see there two constituencies I wanted to compare and contrast in this democratic land governed by this center-left populist…

The first was extremely small in number, depending on how you count it only a few thousand people at the most. They represented the least popular institution in American society, even less popular in many polls than the Congress, which was saying something in a land where the Congressional leadership had been rated as less popular than head lice and root canal surgery. The group in question was widely blamed for an economic collapse more severe than any in 80 years, and was widely believed by journalists covering them, lawyers for many different clients who had dealt with them, and ex-prosecutors following their practices to have engaged in massive and wide-scale fraud on top of an estimated million counts of perjury in just one scam that they pulled off (something referred to by the media as robo-signing). They were reviled by every major bloc of American voters, including those of the conservative party as well as by all the key blocs of swing voters. And to top it all off, with their money and their rhetoric, they overwhelmingly supported the losing candidate in the Presidential election.

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The Federal government and the Attorneys General from 49 states have signed a deal with five major banks over charges of fraud, including reported acts of widespread perjury and forgery, in the so-called “robo-signing” scandal.

A few days ago we suggested that any deal be scored against five basic principles: openness, justice, restitution, deterrence, and reconciliation. It's clear that this deal falls short in every category. The best thing that can be said about it is that, thanks to a few tough holdouts led by New York AG Eric Schneiderman, it now allows additional civil and criminal investigations to proceed.

That's far from nothing, and it could be a big deal. But it will only be a big deal if the Administration stops coddling banks and devotes a lot more resources to helping homeowners and upholding justice.

Up to now, the fight has been to prevent the Administration from doing another cushy bank deal. Now that the door's been left open to further action, there's a new fight: to demand that they devote the Federal government's resources to investigating Wall Street crime.

Our own scoring of the agreement follows, based on the criteria we set out last week. Others may have a different opinion. But now that the deal's done, the way forward is clear. To paraphrase Joe Hill, don't mourn or celebrate: Organize.

The Score

Openness: Has the truth been brought to light? Do we finally understand what happened to us, why it happened, and who's responsible?

The agreement trades away the leverage that investigators gained by essentially catching bankers dead-to-rights as they broke laws on a mass scale through robo-signing. That means they can't use that leverage to “sweat” more information out of the banks.

We wrote in our scorecard that “there's a lot we don't know about bank malfeasance,” including the guilt or innocence of individual bankers. Sadly, we may never know. This deal appears to end ongoing investigations into “robo-signing.” If you see a bank CEO whining on television about his industry's bad reputation, we're not likely to ever learn if he ever personally signed off on criminal behavior. (Which would make him a criminal too, of course.)

There is, however, an upside. We wrote that “any settlement which closes the door to further investigations gets a much lower score.” This settlement does allow investigations to move forward in other areas. As the Washington Post notes, it “leaves open the possibility of other lawsuits regarding fair housing and fair lending laws, civil rights claims, and claims dealing with how loans were packaged and sold, a process known as securitization. In addition, it does not shield the banks from any criminal violations that arise.”

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A Missouri grand jury handed down multiple felony indictments for foreclosure fraud on Monday. That's the same kind of crime being negotiated in nationwide settlement talks with America's big banks. If people can be indicted for doing it, why should bankers be allowed to write a check and walk away?

"Robo-signing" is the nickname that's been given to the practice of hiring large groups of inexperienced workers (they called them "Burger King Kids" at JPMorgan Chase) to file false statements with local courts in order to process foreclosures. In a typical "robo-signing," someone signs a statement testifying that they had personally reviewed documents that prove the bank has title to a home that's being foreclosed — and might do that many times every hour. That's either perjury or forgery, depending on the way in which the "robo-signing" was done.

Forgery and perjury are serious crimes. It's an even more serious crime to ask others to do it for you.

Banks, and some friendly and lazy journalists, were quick to dismiss the whole issue as a "paperwork problem." If "robo-signing" is a "paperwork problem," then the St. Valentine's Day Massacre was a "misplaced bullet problem."

"Robo-signing" alone is an enormous cloud of alleged criminality hanging over this country's banks. If you throw in all the well-documented instances of investor fraud, which have led to hundreds of millions in settlements, then our banks have committed a massive serial crime wave around mortgages.

But Monday's indictments weren't issued against a bank or a banker. They were issued against a home foreclosure processing company and its chief executive. That's today's news. Stay tuned.

Deal in Limbo

Meanwhile those settlement charges appear stalled, thanks to holdout Attorneys General from key states who refuse to give the banks blanket immunity. Another announcement deadline was missed on Monday, and the administration negotiators' subsequent announcement that "more than 40 states" have already signed on was just smoke and mirrors. More than 40 states signed on to a weaker agreement months ago, so the administration was hyping a non-event.

Tea-leaf readers have another busy day on Tuesday. New York Attorney General Eric Schneiderman is a pivotal player for several reasons. He was the first and most influential holdout Attorney General, he was named co-chair of the president's heretofore lackluster mortgage fraud task force, and he filed a lawsuit last week against several major banks for their use of the electronically-driven shell game of a pseudo-corporation known as MERS Inc.

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It's not unheard of that people facing incarceration sometimes kill themselves. But there's no question that Tracy Lawrence was a huge threat to some powerful interests:

A notary public who signed tens of thousands of false documents in a massive foreclosure scam before blowing the whistle on the scandal has been found dead in her Las Vegas home.

NBC station KSNV of Las Vegas reported that the woman, Tracy Lawrence, 43, was scheduled to be sentenced Monday morning after she pleaded guilty this month to notarizing the signature of an individual not in her presence. She failed to show up for her hearing, and police found her body at her home later in the day.

It could not immediately be determined whether Lawrence, who faced up to one year in jail and a fine of up to $2,000, died of suicide or of natural causes, KSNV reported. Detectives said they had ruled out homicide.

Lawrence came forward earlier this month and blew the whistle on the operation, in which title officers Gary Trafford, 49, of Irvine, Calif., and Geraldine Sheppard, 62, of Santa Ana, Calif. — who worked for a Florida processing company used by most major banks to process repossessions — allegedly forged signatures on tens of thousands of default notices from 2005 to 2008.

Trafford and Sheppard were charged two weeks ago with 606 counts of offering false instruments for recording, false certification on certain instruments and notarization of the signature of a person not in the presence of a notary public. You can read a .pdf version of their indictment here.

Police said at the time that the alleged scam had thrown into question the legality of most Las Vegas home foreclosures in the past few years, leaving many people living in foreclosed-upon homes that they unknowingly don't actually own.