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Settlement money in DE budget prompts federal review request

Delaware Public Media

A Delaware nonprofit is asking U.S. Attorney General Loretta Lynch to investigate whether the state is misusing settlement money that was meant to remedy harm from the 2008 financial crisis.

State lawmakers saved about $29 million from two settlements from Bank of America and Citigroup earlier this year after using some of the funds to plug budget holes.

The leftover cash is expected to help bridge similar gaps next year with revenue projections remaining flat.

Rashmi Rangan is executive director for the Delaware Community Reinvestment Action Council, which sent the letter to Lynch earlier this week. She says the way the state is using the money goes against the terms of the settlements.

“A portion of the money that was supposed to do something to the citizenry of Delaware that were hurt is not being allocated there and that is what is troubling," Rangan said.

The cash has to go toward housing-related issues and remediating any damage caused by the banks, she says.

“Unless they are anticipating this harm to be ongoing, this harm has to be cured now. If it needs new programming, [create] new programming.”

Her group is now waiting to hear back from Lynch on their request.

Neither Joint Finance Committee chair Sen. Harris McDowell or Controller General Mike Morton returned requests for comment.

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