Friday, February 20, 2015

Eric Holder asks lawyers to pursue bankers

Since the mortgage meltdown, some have criticized the federal government for failing to hold bank executives responsible.

Eight years after defaults on subprime mortgages helped spark the recession, are those critics about to get their wish?

Bloomberg reported this week that U.S. Attorney General Eric Holder is pressing for action against executives at firms that played a role in the subprime mortgage crisis, even as he prepares to leave his post.

Holder (AFP/Getty Images)
Here's an excerpt:
Holder, who is stepping down as soon as his successor, Loretta Lynch, is confirmed, has asked U.S. attorneys involved in residential mortgage-backed securities cases to report in 90 days on whether they can develop cases against individuals, he said Tuesday at the National Press Club in Washington. 

“That will be a report ultimately that will be given to Loretta to make determinations about whether further action is appropriate,” Holder said.
The story points out that Holder has faced criticism from lawmakers that the Department of Justice has not gone after bank executives to hold them responsible for their roles in the worst financial crisis since the Great Depression.

The Justice Department has also been faulted for resolving cases against banks with settlements that have allowed them to escape criminal charges by paying fines, improving controls and promising not to break the law, the Bloomberg story says.

Bank of America is among banks that have reached settlements with the government to resolve claims stemming from the mortgage crisis. In August, for example, the Charlotte-based bank struck a $17 billion settlement with the Justice Department over toxic mortgages. No individual at the bank was charged with a crime in connection with that case.

A Bank of America spokesman declined to comment.