Regulatory Reform Subcommittee Holds Hearing on the Justice Department’s Controversial Mortgage-Lending Settlements

Regulatory Reform Subcommittee Holds Hearing on the Justice Department’s Controversial Mortgage-Lending Settlements

WASHINGTON, D.C. – February 5, 2015 – (RealEstateRama) — On Thursday, February 12th at 10:30 a.m., the Regulatory Reform, Commercial and Antitrust Law Subcommittee will hold an oversight hearing entitled “Consumers Shortchanged? Oversight of the Justice Department’s Mortgage Lending Settlements.”

The hearing will examine startling terms in the Justice Department’s two recent mortgage-lending settlements with Bank of America and Citigroup, including a requirement that the banks donate over one hundred million dollars to a list of eligible activist groups. Eligible groups include La Raza and NeighborWorks, an organization that has been described as “fund(ing) a national network of left-wing community organizers operating in the mold of Acorn.” In addition, banks earn two dollars worth of credit against their overall consumer relief commitment for donations above the minimum to activist groups. In contrast, direct forms of consumer relief such as loan modifications earn only dollar-for-dollar credit.

The hearing will also address a letter to Attorney General Eric Holder sent by House Judiciary Committee Chairman Bob Goodlatte (R-Va.) and House Financial Services Committee Chairman Jeb Hensarling (R-Tex.) on November 25, 2014. In the letter, the Chairmen asked the Attorney General why “the terms in the Justice Department’s two latest settlements look less like consumer relief and more like a scheme to funnel money to politically favored special interest groups.”

At the hearing, the Subcommittee will hear from Mr. Geoffrey Graber, the Deputy Associate Attorney General and Director of the RMBS Working Group of the Financial Fraud Enforcement Task Force at the U.S. Department of Justice. Additional witnesses will be announced on the Judiciary Committee’s website closer to the date of the hearing.

House Judiciary Committee Chairman Bob Goodlatte (R-Va.) and Regulatory Reform Subcommittee Chairman Tom Marino (R-Pa.) issued the following joint statement on the upcoming subcommittee hearing:

“Decisions made by the Justice Department increasingly reflect a culture of politics and games rather than nonpartisan justice. The American people deserve answers from the Justice Department on its controversial settlements with Bank of America and Citigroup and their required donations to activist groups. Using bank settlements to funnel money to activist groups instead of consumers who were harmed is not only bad policy – it is a breeding ground for abuse and favoritism. We look forward to getting answers and hearing from the Justice Department on their rationale behind their startling decisions.”

The hearing will take place in 2141 Rayburn House Office Building and will be webcast live at judiciary.house.gov. Additional witnesses and witness testimonies will be posted on the Judiciary Committee’s website when available.

CONTACT: Kathryn Rexrode or Jessica Collins, (202) 225-3951

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