The Justice Department has found a new way to pursue civil rights lawsuits, using the powers of the Civil Rights Division not just to win compensation for victims of alleged discrimination but also to direct large sums of money to activist groups that are not discrimination victims and not connected to a particular suit.
In the past, when the Civil Rights Division filed suit against, say, a bank or a landlord, alleging discrimination in lending or rentals, the cases were often settled by the defendant paying a fine to the U.S. Treasury and agreeing to put aside a sum of money to compensate the alleged discrimination victims. There was then a search for those victims -- people who were actually denied a loan or an apartment -- who stood to be compensated. After everyone who could be found was paid, there was often money left over. That money was returned to the defendant.
Now, Attorney General Eric Holder and Civil Rights Division chief Thomas Perez have a new plan. Any unspent money will not go back to the defendant but will instead go to a "qualified organization" approved by the Justice Department. And if there is not enough unspent money -- that will be determined by the Department -- then the defendant might be required to come up with more money to give to the "qualified organization."
The arrangement was used in a recently-settled case, United States v. AIG Federal Savings Bank and Wilmington Finance. The Justice Department alleged that AIG violated the Fair Housing Act and the Equal Credit Opportunity Act by allowing third-party wholesale mortgage brokers to "charge African-American borrowers higher direct broker fees for residential real estate-related loans than white borrowers." The financial institution denied any wrongdoing, and there was no factual finding of wrongdoing. Nevertheless, under the terms of a March 19, 2010 consent decree, AIG agreed to pay $6.1 million to "aggrieved persons who may have suffered as a result of the alleged violations."
That is standard procedure in such cases. But then AIG also agreed, in the words of the consent decree, to "provide a minimum of $1,000,000 to qualified organization(s) to provide credit counseling, financial literacy, and other related educational programs targeted at African-American borrowers."
Read more at the Washington Examiner
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5 comments:
Where they charged higher interest rates maybe because of the credit rating? Seriously the last time I checked they dont ask for race on credit apps.
10:56 Oh no no that cant be.. They all have great credit, what with there no jobs, on welfare, not to mention the brand new Cadillac or Lincoln they all drive...LOL
Who would possibly think they could have bad credit, lets play the race card..
11:40 the race card is played once assume that because these are poor blacks, they must not really be poor. Just gov. mooches all driving "brand new Cadillac or Lincoln".
Why don't you folks actually read up on these cases before commenting.
11:50
Look what happened to Freddie and Fannie. They were made to give out loans to people that should NOT have gotten them. If you can not afford a down payment on a house you can not afford to have a house PERIOD.
2:29, please check your facts and stop falling for the Rush/Hannity talking points. Most of the loans that defaulted resulted from investment/vacation homes. Defaults on these homes were bad enough but the complex debt swaps compounded the problem even more which blew this up into a world wide credit crunch.
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