GOODLATTE, HENSARLING, MARINO, AND DUFFY CONTINUE INQUIRY INTO MORTGAGE LENDING SETTLEMENTS

GOODLATTE, HENSARLING, MARINO, AND DUFFY CONTINUE INQUIRY INTO MORTGAGE LENDING SETTLEMENTS

WASHINGTON, D.C. – May 15, 2015 – (RealEstateRama) — House Judiciary Committee Chairman Bob Goodlatte (R-Va.), Financial Services Committee Chairman Jeb Hensarling (R-Texas), Regulatory Reform, Commercial and Antitrust Law Subcommittee Chairman Tom Marino (R-Pa.), and Oversight and Investigations Subcommittee Chair Sean Duffy (R-Wis.) pressed Attorney General Lorretta Lynch for answers regarding controversial terms in certain Department of Justice (DOJ) mortgage lending settlements.

The Chairmen are concerned that a substantial amount of the settlement proceeds are not going directly to consumers who have been genuinely harmed.  Instead, it appears that DOJ is systematically subverting Congress’s budget authority by using the settlements to funnel money to activist groups.

The Chairmen write that, so far, DOJ’s response to Congressional inquiries has been inadequate and raised more questions:

“Remarkably, what little material DOJ did provide appears to confirm our suspicion that activist groups that stood to gain from mandatory donation requirements were involved in or advocated for the decision to include those provisions in the settlements.  This does not square well with DOJ’s testimony to the Judiciary Committee that ‘[t]here was no outside third party group . . . that participated in any way in these negotiations.’”

The evidence includes an email from activist leaders requesting a meeting with then Deputy Attorney General Tony West to “make the case that the Department of Justice should make ‘grants to capitalize community equity restoration funds’ mandatory in all future settlements.”  (Emphasis added.)  In another email, activist groups suggest offering a bank “enhanced credit towards its settlement requirements” for making such donations.  A meeting ultimately took place on March 4, 2014 with a senior attorney from the Associate Attorney General’s office.  Just a few months later, DOJ announced the Citigroup and Bank of America settlements, both of which required mandatory donations to community groups and offered double credit for donations above the required total minimum of $150 million.

The letter also provides further details on “the activist pedigrees of the groups we know were involved.”

Chairman Goodlatte, Chairman Hensarling, Subcommittee Chairman Marino, and Subcommittee Chairman Duffy will continue investigating to obtain a full picture of the genesis of these controversial settlement terms, including who at DOJ championed or approved them.

Background

The Committees’ investigation began with a letter to DOJ on November 25, 2014 requesting information on who at DOJ was responsible for including the controversial mandatory donation terms in the settlements.  DOJ finally responded with 59 pages of emails on March 31, 2015.  However, those emails showed only outside group influence.  DOJ did not produce any of the internal correspondence the Committee requested.  What little DOJ did produce, did not square well with a senior DOJ official’s testimony at a February 12, 2015 Regulatory Reform, Commercial and Antitrust Law Subcommitteehearing.

The letter requests all the documents the Chairmen originally asked for on November 25 and asks for answers to additional questions that have arisen in the interim.  Today’s letter makes good on Chairman Goodlatte’s statement that efforts would intensify if DOJ did not fully cooperate with the inquiry.

The signed letter can be found here.

CONTACT: Kathryn Rexrode or Michael Woeste (202) 225-3951

Previous articleUSDA Seeks Applications to Expand Economic Development in Rural Communities
Next articleWalkable Urban Places are the Future of Real Estate Development