Look Who’s Getting That Bank Settlement Cash, Hint… It’s Not You

Ponzi Settle

Look Who’s Getting That Bank Settlement Cash

Tens of millions of dollars disguised as ‘consumer relief’ are going to liberal political groups.

Imagine if the president of the United States forced America’s biggest banks to funnel hundreds of millions—and potentially billions—of dollars to the corporations and lobbyists who supported his agenda, all while calling it “Main Street Relief.” The public outcry would rightly be deafening. Yet the Obama administration has used a similar strategy to enrich its political allies, advance leftist pet projects, and protect its legacy—and hardly anyone has noticed.

The administration’s multiyear campaign against the banking industry has quietly steered money to organizations and politicians who are working to ensure liberal policy and political victories at every level of government. The conduit for this funding is the Residential Mortgage-Backed Securities Working Group, a coalition of federal and state regulators and prosecutors created in 2012 to “identify, investigate, and prosecute instances of wrongdoing” in the residential mortgage-backed securities market. In conjunction with the Justice Department, the RMBS Working Group has reached multibillion-dollar settlements with essentially every major bank in America.

The most recent came in April when the Justice Department announced a $5.1 billion settlement with Goldman Sachs. In February Morgan Stanley agreed to a $3.2 billion settlement. Previous targets were Citigroup ($7 billion), J.P. Morgan Chase ($13 billion), and Bank of America, which in 2014 reached the largest civil settlement in American history at $16.65 billion. Smaller deals with other banks have also been announced.

Combined, the banks must divert well over $11 billion into “consumer relief,” which is supposed to benefit homeowners harmed during the Great Recession. Yet it is unknown how much, if any, of the banks’ settlement money will find its way to individual homeowners. Instead, a substantial portion is allocated to private, nonprofit organizations drawn from a federally approved list. Some groups on the list—Catholic Charities, for instance—are relatively nonpolitical. Others—La Raza, the National Urban League, the National Community Reinvestment Coalition and more—are anything but.

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2 Responses to “Look Who’s Getting That Bank Settlement Cash, Hint… It’s Not You”
  1. Clara Padilla-Silver says:

    I am a foreclosure defense attorney for a non profit law firm, I provide free legal services to seniors in or about to be in foreclosure. The settlement funds allow us to serve many seniors who would be left homeless at the end of their long and productive lives. We are trying to access the last disbursement to the states, but our State Supreme Court seems to want the money and is making it very difficult for us to access desperately needed funds. We were given a small amount (I took a salary cut) to get us through the year, but with the stipulation that I would close my 50 active cases (we are a judicial foreclosure state) by the end of the fiscal year, and I am not allowed to take new cases for the one year. I turn away clients every day.

  2. Hammertime says:

    This will be the only real stain on President Obama’s legacy. The article does seem a bit slanted since red states also diverted money. The reality is these “liberal” groups aren’t really liberal just like so called conservative and “faith based” groups. They work hand in hand with Chase and the others while stuffing their pockets and sweeping up real estate. There’s the case in southern CA of the nice elderly couple was helping the homeless paying themselves millions while building their empire. Just like the Trump’s and Clinton’s.

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