Citi Settlement Over Mortgage Fraud Reaffirms DOJ’s ‘Too Big to Jail’ Policy
July 14, 2014
Citi Settlement Over Mortgage Fraud Reaffirms DOJ’s ‘Too Big to Jail’ Policy
Note: Today, the U.S. Department of Justice announced that Citigroup will pay $7 billion to settle civil mortgage fraud charges stemming from the bank’s role in the 2008 financial crisis. That crash caused more than $12 trillion in economic damage. Below are comments from Public Citizen experts.
“The Department of Justice’s latest settlement with Citigroup over its massive mortgage fraud reemphasizes the backroom nature of these deals. By Attorney General Eric Holder’s own assessment, Citi’s actions were “egregious.” Yet no individuals are being held to account, the bank is not being charged with any criminal activity, the corporation faces no review of its bank charter and business continues in its offices spanning 180 countries. Attorney General Holder says that the settlement doesn’t absolve Citi or Citi officials of possible criminal charges. But the track record of the Department of Justice offers little indication that individuals or the company will be held accountable. We need more transparency on how and why these decisions are made.”
– Lisa Gilbert, director of Public Citizen’s Congress Watch division
“As our recent report demonstrates, the Department of Justice has, in the vast majority of cases, shied away from aggressively prosecuting Wall Street banks and opted instead for fines and settlements. As this investigation showed, Citi employees deliberately concealed the risky nature of the loans they were selling. Given how central this deception was to the 2008 financial crisis that devastated our economy, the American public deserves far more than what they’re getting.”
– Amit Narang, regulatory policy advocate, Public Citizen’s Congress Watch division
“Citi helped fuel the housing bubble that ultimately crashed the American economy, displacing millions of Americans from their homes and jobs. This settlement does little to repair that damage. What should be a painful moment for an institution that trades on trust has become simply a parenthetical in a quarterly press conference about its earnings.”
– Bartlett Naylor, financial policy advocate, Public Citizen’s Congress Watch division
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