BofA Must Pay Excess Settlement Funds To Acorn Clones

Discussion in 'Politics' started by Trader666, Jan 15, 2012.

  1. BofA Must Pay Excess Settlement Funds To Acorn Clones
    Posted 01/04/2012 03:46 PM ET

    Bank of America (BAC) must turn over excess funds from a record $335 million discrimination fine to community organizing groups. Critics say it's a "political backdoor" to subsidize Democrat-tied Acorn "clones."

    The unusual mandate is buried in a Justice Department filing last month detailing settlement terms with the nation's largest bank. Prosecutors had alleged BofA's Countrywide Financial mortgage unit discriminated against minority homebuyers in the years leading up to the financial crisis.

    Funds not passed out to alleged victims after two years will be handed out to "qualified" groups unconnected to the case that provide credit and housing counseling and similar services to blacks and Hispanics in areas where the discrimination allegedly occurred.

    Prosecutors say the more than 200,000 alleged victims of Countrywide subprime loans reside chiefly in Chicago, Detroit, Los Angeles, Phoenix, Las Vegas, Denver, Houston, Dallas, Atlanta and Washington, D.C. Community organizing groups have large operations in these cities.

    The order further states that recipients of such funds can't be tied to Bank of America. But they can include nonprofits that offer financial education, counseling and other aid related to mortgage programs to which BofA has "furnished substantial support."

    In 2008, BofA donated $2 million to Acorn Housing Corp. of Chicago. It also gave $500,000 to the National Community Reinvestment Coalition of Washington and $300,000 to the National Urban League of New York.

    The government must OK the selection of nonprofit groups benefiting from money left over from the $335 million interest-bearing escrow fund — the largest U.S. residential fair-lending settlement ever.

    Millions of dollars could end up at housing-rights groups that pressure banks to lower underwriting standards for uncreditworthy borrowers, critics say.

    Justice is improperly using banks to subsidize Democratic-aligned groups, Heritage Foundation fellow Ernest Istook says.

    "It's a shakedown," the former GOP Oklahoma congressman told IBD. "This is another political backdoor to use the government to channel money to your friends."

    Under the settlement, BofA can not discuss details of the case. But in court papers, it denied all the discrimination charges and argued that it had pledged "substantial" sums to such community organizers before the crisis.

    Countrywide's Other Bill

    When BofA bought Countrywide in 2008, it committed a record $1.5 trillion to minority lending and urban reinvestment. The 10-year accord replaced the bank's half-finished $750 billion goal set in 2004, when it acquired Fleet Bank.

    A key recipient of that earlier deal was Boston-based Neighborhood Assistance Corporation of America, certified by HUD to counsel delinquent borrowers.

  2. pspr


    The corruption in the Obama administration is just beyond belief. I hope Romney airs all this crap during the general election.
  3. Lucrum


  4. If you think that's bad, check out this pandering pile of horseshit from the Federal Reserve Bank of Boston... yet more proof that the government's still in the business of pressuring banks to make loans to people who can't pay them back:

    Closing the Gap: A Guide To Equal Opportunity Lending
  5. Ricter


    More importantly, how many in upper management at BoA have been terminated?
  6. For what Countrywide did before BofA bought them?
  7. Ricter


    That's how it works. We just paid nearly a quarter million (not fines, but to government) for errors made previously by an acquisition.
  8. Again you show your ignorance of the facts. That was Ken Lewis' brain fart and he's long gone.
  9. Ricter


    That's why I asked. But thank you for googling it just now.
  10. Nah... that's what you and IQ47 do. Unlike you two, I actually trade so have knowledge of these things from that.
    #10     Jan 16, 2012