Gov. and Legislature Ignoring Appellate Court’s Order to Return ‘Unlawfully Diverted’ Subprime Crisis Funds

By Katy Grimes : californiaglobe – excerpt

The settlement funds would have directly helped low-income families and people of color

In 2018, Gov. Jerry Brown was ordered by the state’s 3rd Appellate District Court to repay more than $331 million in funds the state illegally diverted from a national fund intended to help homeowners struggling with foreclosures from the housing crisis. Instead of complying with the court order, Democrats pushed through a bill to legitimize the theft of funds.

Governor Gavin Newsom just signed Senate Bill 113, which will allow his administration to take a year or more to set up a nonprofit trust that would invest the funds, in still-unknown ways, rather than distributing the money to wronged homeowners. The administration said it would only spend investment profits, not the actual settlement funds.

The settlement funds would have directly helped many California homeowners, including low-income families and people of color…

Stealing money intended to help people damaged by what Democrats called “predatory lenders” and “Wall Street” in order to bail out the gross abuses by the Governor’s and Legislature’s wasteful spending is probably among the lowest actions.

Notably, the Legislature just passed AB 539, a bill to bar “predatory lenders,” like payday small loan companies, from imposing excessively high-interest rates on people who borrow $2,500 up to $10,000, while also passing legislation to allow cities to open public government banks. Perhaps this settlement is seed money for the government banks… (more)

No wonder his popularity is slipping. Too much money and too much power are a dangerous combination that seems to go to everyone’s head. In this case, the governor wants to double down on the crime the state was accused of to continue the illegal action that brought on the lawsuit. Are the funds unavailable because they are tied up in long-term investments? The plot thickens. He is giving non-profits a bad name by using them to funnel the funds. But, if the goal is to rid the state of unwanted single-family homeowners, the delay tactic makes perfect sense.


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