Monday, July 14, 2014

Citigroup Agrees to Pay $7 Billion Settlement

Citigroup has agreed to pay $7 billion related to allegations that it packaged bad mortgages during the pre-financial crisis period.  $4 billion of the payment will be penalties for the alleged conduct.  $2.5 billion will be used in mortgage modifications and related relief for homeowners.  The remaining $500 million will be distributed between five states and the Federal Deposit Insurance Corp.

The settlement avoids further civil litigation by the Department of Justice.  According to CNN, Attorney General Eric Holder stated, "Under the terms of this settlement, the bank has admitted to its misdeeds in great detail.  The bank's activities shattered the livelihoods throughout the country."  He went on to state, "They contributed mightily to the financial crisis that devastated our economy in 2008."

The entire CNN article regarding the settlement is available here.

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