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When’s Congress Going to Pay a Fine?

July 14, 2014

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.

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5 Comments leave one →
  1. July 21, 2014 8:14 pm

    Mike, i don’t twit. I have enough problem blogging. Or were you asking me to add a share-via-twitter function?

    Mike and Paul, thanks much for the re-blog.

    • July 21, 2014 8:46 pm

      Asking if you might add a share via twitter button…only if you want to. I resisted twitter for a long time myself before I succumbed to the twitterverse.

      And your most welcome. You write some good posts.

  2. Paul Lemmen permalink
    July 14, 2014 5:19 pm

    Reblogged this on Dead Citizen's Rights Society.

  3. July 14, 2014 5:04 pm

    Wishful thinking Jim. On a side note…wish you had a twitter button.

  4. July 14, 2014 5:02 pm

    Reblogged this on That Mr. G Guy's Blog.

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