The Delaware Community Reinvestment Council filed suit against Governor Markell and State Treasurer Ken Simpler to prohibit Delaware from spending $31 million in settlement funds from Bank of America.
In August of 2014, Bank of America reached an agreement with the state of Delaware to settle alleged violations in the way the bank issued residential mortgages. The bank’s alleged actions resulted in increased foreclosures and home vacancies.
In the lawsuit filed Monday in the Delaware Court of Chancery, DCRAC’s executive director Rashmi Rangan called on the court to stop the state from spending money from that settlement on things not consistent with the terms of the agreement.
“Despite the clear and unambiguous conditions in the settlement agreement…the governor and others have failed and refused to carry out the intent of the settlement agreement,” Rangan said. “Rather, the governor and other Delaware elected officials have obligated a significant portion of this $31 million to unintended uses to balance the state’s budget.”
The terms of the settlement agreement call for the money to be spent to remediate the damage caused by the housing crisis to Delaware communities. That has not happened, according to Rangan. “The governor and others have failed and refused to carry out the intent of the settlement agreement.”