News Column

US Justice Department faces suit over mortgage loans deal

February 11, 2014

CITY A.M. REPORTER



NON-PROFIT group Better Markets yesterday claimed the Justice Department's$13bn (7.9bn) settlement over bad mortgage loans sold by JP Morgan before the crisis was "unlawful."


The campaign group is challenging the deal because it fears the Department is not acting properly when reaching settlements with banks.


Better Markets said it was appalled that the settlement gave the bank "blanket civil immunity" for its conduct without sufficient judicial review.


The record settlement, which was reached in November, does not however release JP Morgan from potential criminal liability over the mortgages it packaged into bonds.


"The Wall Street bailouts were bad enough, but now taxpayers are being forced to accept a secretive backroom deal that may well have been another sweetheart deal," said Better Markets' chief executive Dennis Kelleher.


"The Justice Department cannot act as prosecutor, jury and judge and extract $13bn in exchange for blanket civil immunity to the largest, richest, most politically connected bank on Wall Street."


The lawsuit, which names the Justice Department and Attorney General Eric Holder, was filed in federal court in Washington DC.


The Department maintains it did act lawfully.


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Source: City A.M. (UK)


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