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Justice Dept. halts settlements funding outside groups
Source: Reuters
BUSINESS NEWS | Wed Jun 7, 2017 | 9:15am EDT
Justice Dept. halts settlements funding outside groups
The U.S. Justice Department has barred legal settlements in federal investigations that include donating funds to community organizations or other third-party groups, rather than to those directly harmed by the wrongdoing, in a change that could affect banks and other corporations.
Settlement payments must be directed to victims affected by the defendants' actions and then to the federal government, according to a statement on Wednesday by U.S. Attorney General Jeff Sessions. It was the latest action by the Republican Trump administration to end policies put in place by former President Barack Obama, a Democrat.
Such agreements were a feature of several U.S. settlements with banks in the wake of the 2008 financial crisis.
Under Obama, the Justice Department aimed to hold banks accountable for shoddy securities that contributed to the U.S. housing market collapse. From 2013 to 2016, the department reached $46 billion in settlements with U.S. banks that in part directed funds to approved housing aid and other related groups.
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Justice Dept. halts settlements funding outside groups
The U.S. Justice Department has barred legal settlements in federal investigations that include donating funds to community organizations or other third-party groups, rather than to those directly harmed by the wrongdoing, in a change that could affect banks and other corporations.
Settlement payments must be directed to victims affected by the defendants' actions and then to the federal government, according to a statement on Wednesday by U.S. Attorney General Jeff Sessions. It was the latest action by the Republican Trump administration to end policies put in place by former President Barack Obama, a Democrat.
Such agreements were a feature of several U.S. settlements with banks in the wake of the 2008 financial crisis.
Under Obama, the Justice Department aimed to hold banks accountable for shoddy securities that contributed to the U.S. housing market collapse. From 2013 to 2016, the department reached $46 billion in settlements with U.S. banks that in part directed funds to approved housing aid and other related groups.
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Read more: http://www.reuters.com/article/us-usa-justice-settlements-idUSKBN18Y1L2