When’s Congress Going to Pay a Fine?
I see that Citigroup just settled with the DOJ on its role in the sub-prime mortgage debacle from the middle of the last decade.
In the deal announced Monday, Citigroup will make a $4 billion civil monetary payment to the Justice Department, and another $500 million in compensatory payments to state attorney’s general and the Federal Deposit Insurance Corporation.
The bank will provide $2.5 billion in consumer relief, which will include financing for construction and preservation of affordable housing, as well as principal reduction and forbearance for residential loans.
‘The comprehensive settlement announced today with the U.S. Department of Justice, state attorneys general, and the FDIC resolves all pending civil investigations related to our legacy RMBS and CDO underwriting, structuring and issuance activities,’ said CEO Michael Corbat. ‘We also have now resolved substantially all of our legacy RMBS and CDO litigation.’
JP Morgan has previously settled for $13B, and Bank of America is still under pressure. All of this stems from the companies being pushed to provide more loans for homeowners. So they began to offer the sub-prime mortgages to those who couldn’t qualify for a regular mortgage. The resulting dip in home prices caused a collapse in the market that is still ringing through the markets.
Wait, they were pushed? Yep. Most people forget that pressure was put on the banks by Congress, who passed legislation to make home buying easier. The administration then pushed the banks again via Fannie and Freddie (which essentially totally collapsed in the down-swing). So, when is Congress going to pay a fine? When does the administration admit culpability for sucking down billions of our tax dollars in this mess?
Oh, right, they won’t. I hope we feel better as taxpayers knowing that.