House Republicans are accusing the Obama administration of letting millions of dollars from recent mortgage-lending settlements go toward politically favored advocacy groups, in turn “shortchanging” the people originally harmed by the financial crisis.
The separate deals were reached with the Justice Department in summer 2014, with Citigroup agreeing to pay $7 billion for misleading investors over mortgage-backed securities and Bank of America paying $16.65 billion for similar actions.
But of the $24 billion, roughly $150 million is tabbed for financial-counseling agencies — a category that includes liberal-leaning groups such as the National Council of La Raza.
While some Americans likely will need help figuring out how to recover money through the settlement — help these organizations could give — Republicans on the House Judiciary Committee are questioning why certain activist groups are on the Department of Housing and Urban Development-approved list.
“The Obama administration is shortchanging victims by using these settlements to send money to their pet projects rather than allowing it to go to directly to the people who were harmed in the first place,” House Judiciary Committee Chairman Bob Goodlatte, R-Va., told FoxNews.com on Monday.“Furthermore, the administration is also abusing the separation of powers by using these cases to funnel money to their preferred special interests in an attempt to do an end run around Congress, which the Constitution grants the power of the purse.”