The U.S. Department of Justice received a massive settlement from Bank of America — touted by Attorney General Eric Holder’s office as “the largest civil settlement with a single entity in American history” — over BoA’s alleged obfuscation of the risks associated with residential mortgage-backed securities (RMBS) during the recent housing crisis.
But, just as it did two years ago when it took $335 million in a settlement with Countrywide Financial Corp., DOJ has structured a deal which ensures a big chunk of that money never finds its way into the hands of the minority and underrepresented groups who paid higher home interest rates because of their racial – and not their credit – status.
In the BoA settlement, announced last week, the first money – about $7 billion – goes to the plaintiffs. Then much of it is tied up in BoA obligations to offer settlement-enforced loans for low-income housing.
As for what’s left? After four years of BoA rehab, DOJ is giving away the leftovers to progressive activist groups like the National Council of La Raza, the Neighborhood Assistance Corporation of America, the National Community Reinvestment Coalition and even a rebranded local arm for ACORN in New York – all under the pretense of investing in boots-on-the-ground community advocacy in areas with demographics that match those of the plaintiffs.
What that really amounts to, as Investor’s Business Daily scathingly put it, is the creation of a “massive slush fund for Democrat special interests.”
Extortion: Radical Democrat activist groups stand to collect millions from Attorney General Eric Holder’s record $17 billion deal to settle alleged mortgage abuse charges against Bank of America.
Buried in the fine print of the deal, which includes $7 billion in soft-dollar consumer relief, are a raft of political payoffs to Obama constituency groups. In effect, the government has ordered the nation’s largest bank to create a massive slush fund for Democrat special interests.
Besides requiring billions in debt forgiveness payments to delinquent borrowers in Cleveland, Atlanta, Philadelphia, Oakland, Detroit, Chicago and other Democrat strongholds — and up to $500 million to cover personal taxes owed on those checks — the deal requires BofA to make billions in new loans, while also building affordable low-income rental housing in those areas.
If there are leftover funds in four years, the settlement stipulates the money will go to Interest on Lawyers’ Trust Account (IOLTA), which provides legal aid for the poor and supports left-wing causes, and NeighborWorks of America, which provides affordable housing and funds a national network of left-wing community organizers operating in the mold of Acorn.
In fact, in 2008 and 2009, NeighborWorks awarded a whopping $25 million to Acorn Housing.
As Judicial Watch points out, this isn’t the first time Holder’s DOJ has done this. But the scale of this deal dwarfs what transpired in 2012, when “Countrywide Financial Corporation doled out $335 million to settle its discrimination lawsuit with the feds.”
“The money was supposed to be distributed to more than 200,000 minority victims who supposedly were charged higher interest rates and fees than white borrowers based on their race not their credit,” JW states. “Instead, a chunk of the money went to Democrat-tied groups not connected to the lawsuit, including the scandal-plagued Association of Community Organizations for Reform Now (ACORN) and the open-borders National Council of La Raza (NCLR).”