Bank of America (NYSE:BAC) last week agreed to pay $16.65 billion to settle claims that SNL noted “primarily” emanated from the activities of Countrywide Financial and Merrill Lynch, which prosecutors said knowingly sold toxic mortgages in the years leading up to the financial crisis and recession of 2007-09, before BofA acquired Countrywide in July ’08 and Merrill in January ’09.
Bank of America paid a fine mainly due to the actions of Countrywide Financial and Merrill Lynch, which Bank of America acquired in July 2008 and January 2009. The fine was based on the actions of Countrywide and Merrill Lynch before they were owned by Bank of America. Bank of America acquired these companies under pressure from the government in order to help slow the damage in the financial crisis.
But massive legal bills — with more than $128 billion paid in settlements and fines by the nation’s six largest lenders, according to SNL Financial — may not prevent another financial crisis and could make big banks less cooperative in rushing to the nation’s rescue should another financial crisis flare up, critics say.
So what happens to this money? Does it go to the people who were hurt by the two company’s business practices?
The Daily Caller reports:
The groups benefitting from the lawsuit, according to Investor’s Business Daily, are the National Council of La Raza, Operation Hope, National Community Reinvestment Coalition, and Neighborhood Assistance Corporation of America. The money also went to “delinquent borrowers” in Chicago, Oakland, Detroit, Philadelphia and other major “Democrat strongholds.”
“This is a wealth redistribution scheme disguised as a lawsuit,” Tom Fitton, president of Judicial Watch, told The Daily Caller. “And who benefits from the distribution? Interest groups the administration relies on, outside interest groups, allies and politicians in communities trying to benefit as well.”
…La Raza, Operation Hope, National Community Reinvestment Coalition, and Neighborhood Assistance Corporation of America have all intimidated banks to give loans to minorities, even if they can’t afford to pay them back.
Impeachment is not an option because it would be political suicide. However, it is what is needed. It is a shame that the Democrats in the Senate are more loyal to the President than they are to their country.