CRL applauds Justice Dept.’s settlement with Citigroup
21st July 2014 · 0 Comments
By Frederick H. Lowe
(Special from The NorthStar News & Analysis) — The Center for Responsible Lending praised the U.S. Justice Department’s $7 billion settlement with Citigroup Inc., which ended a government probe into the bank’s subprime lending. Citigroup’s abuses helped spark the subprime-mortgage crisis that began in 2008.
“We are gratified that the people and institutions responsible for the 2008 financial crisis are being held responsible for their actions; we applaud the Justice Department as they continue their important work in finding and prosecuting these offenders,” Debbie Goldstein, CRL’s executive vice president, said in a statement. “But in the meantime, too many American families are still struggling in the aftermath of the historic housing crisis—too many consumers are still stuck in unaffordable loans, too many families have already lost their homes. As CRL research has shown, the effects of the housing crisis disproportionately impacted the communities most vulnerable to financial shocks —many still in the throes of crisis.”
The Center for Responsible Lending published in 2006 “Losing Ground,” a comprehensive study of subprime mortgages. The organization predicted the subprime-mortgage crisis. The center encourages home ownership.
On July 14, U.S. Attorney General Eric Holder announced that Citigroup, one of the largest banks based on assets, agreed to pay $7 billion to resolve the subprime mortgage scandal. The resolution includes a $4 billion civil penalty, the largest penalty levied to-date under the Financial Institutions Reform, Recovery and Enforcement Act.
In addition, Citi agreed to provide $2.5 billion in relief to those homeowners and communities affected by the bank’s fraudulent activities.
“The Center for Responsible Lending looks forward to tracking how this relief will assist consumers and communities hit hardest by the mortgage crisis,” Goldstein said. “Unlike with previous settlements, we hope the settlement monitor will make detailed data available to the public to ensure that those borrowers and communities impacted by the crisis will receive their just benefits from the relief that is provided.”
This article originally published in the July 21, 2014 print edition of The Louisiana Weekly newspaper.