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December 08, 2015

Del. Nonprofit Sues State Over Use of Bank-Settlement Money

A consumer-advocacy group filed suit Monday against Gov. Jack Markell and other top officials in Delaware alleging misuse of tens of millions of dollars from a housing-crisis settlement with big financial institutions, the Associated Press and The News Journal of Wilmington report. The Delaware Community Reinvestment Action Council threatened legal action last month over the state's allocation of some $31 million from the deals with Bank of America, Citigroup, and Standard & Poor's to fill gaps in this year's budget.

Lawmakers are considering using another $30 million in settlement funds to balance next year's budget. The Wilmington-based nonprofit contends the money was intended to aid people and communities hurt by financial firms' misconduct that contributed to the 2008 mortgage crunch. "While the hardest hit communities continue to suffer, the defendants have unconscionably seized these funds and withheld relief," the lawsuit states.