In response to a newly announced settlement between the US Dept. of Justice and Goldman Sachs, Kevin Stein,
associate director at CRC, issued the following statement:
“This settlement includes provisions that can be positive for the families and communities that were most
harmed by Goldman Sachs, and other Wall Street firms that fueled the mortgage meltdown. However, it is worth
noting that the settlement numbers are inflated; there is clear potential for CRA double-dipping abuses, and we
believe this settlement is not commensurate with the financial harm created by Goldman Sachs in California and
throughout the rest of the country. We also see that unlike other settlements, the Goldman Sachs settlement does
not include any provisions to fund housing counselors or legal advocates. Housing counselors and attorneys help
families navigate the complicated process of seeking a loan modification, or in this case, seeking relief under a
settlement. There is a great deal of research demonstrating that families who work with housing counselors and
legal advocates have higher chances of obtaining relief and remaining in their homes, so it’s puzzling why this
was not included in the settlement.”
Our concerns with the settlement mirror our concerns with previous mortgage settlements:

1) Who is Getting Relief? Transparency is Still Missing: While the focus on underserved and rural counties in
California is helpful, the settlement still lacks transparency as to who is actually receiving the relief. A 2014
GAO report that analyzed nonpublic HAMP data confirmed the concerns of community groups in finding
statistically significant differences in the rate of denials and cancellations of trial modifications, and in the
potential for re-defaults of loan modifications for Limited English Proficient and African-American borrowers
and other populations. This settlement would have been a prime opportunity to require Goldman to report the
race, ethnicity and census tract of the families and communities receiving relief- and of the families who were
denied relief under this settlement. While banks resist such reporting, we know it is possible to do so because
Bank of America provided this exact data in order to bid on a contract to provide banking services to the City of
San Francisco in 2013.
2) No Explicit Ban on Bank “Double Dipping” for Settlement and CRA credits: We are deeply concerned
that banks like Goldman Sachs, Chase, Bank of America, and CitiGroup may attempt to claim credit twice for
community reinvestment activities they agreed to engage in as part of settlements for their bad behavior. First,
the banks claim credit for meeting the settlement requirements.Then, the banks claim credit again, for the same
activity, by seeking Community Reinvestment Act credit from their regulators. We’ve raised this “doubledipping”
issue multiple times with the Federal Reserve, Office of the Comptroller of the Currency, and the
FDIC, and yet we are concerned that the status quo will continue. All settlements should explicitly forbid banks
from double-dipping on CRA activities. Settlement relief should address past harm, and add value to, not detract
from, existing and continuing reinvestment obligations and efforts.
3) Tax Write-Offs: Goldman has a reputation of looking out for Goldman, and this settlement is no different.
The US Dept. of Justice allowed Goldman to negotiate that any money the banks spends on consumer relief is
deductible from the bank’s tax bill. The New York Times conservatively estimated that $2.5 billion in consumer
relief could translate to a whopping $875 million in tax savings for the bank.

The positive aspects of this settlement include:
1) A Focus on Hard Hit Areas: In California, the bank is required to provide at least $30 million in consumer
relief, with a goal (though not a requirement) for the bank to provide at least $10 million of that relief to underserved
counties in the Eastern District of California, including Amador, Butte, Calaveras, Colusa, El Dorado,
Fresno, Glenn, Kern, Kings, Madera, Mariposa, Merced, Nevada, Placer, Sacramento, San Joaquin, Shasta,
Solano, Stanislaus, Sutter, Tehama, Tulare, Tuolumne, Yolo and Yuba. This list includes many communities that
are often overlooked when it comes to foreclosure prevention relief and community reinvestment.
2) Affordable Housing: Through the settlement, Goldman can also provide financing or philanthropy to support
affordable rental and for sale housing, with more valuable credit being provided to the bank for housing that is
targeted to lower income families. This is a positive provision to help address the affordable housing crisis our
country and our state faces.
3) Language Access: The bank is required to prepare a plain language document in five languages (Spanish,
Chinese, Tagalog, Vietnamese and Korean) explaining the forms of relief available under this settlement. This
information will be especially helpful for families in diverse states like California to understand how they can
access relief.”