House lawmakers have decided to send South Carolina’s share of a federal mortgage settlement to the state Commerce Department, which recruits companies to the state.
The federal government and 49 state attorneys general -- including S.C. Attorney General Alan Wilson -- reached a $25 billion settlement with five of the country’s largest banks: Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo. Of that settlement, roughly $32 million would come to South Carolina.
Republicans have directed all of that money go to the Department of Commerce’s “closing fund” to help them recruit companies to South Carolina to create jobs.
But Democrats say the only reason South Carolina will receive the settlement money is because big banks took advantage of homeowners. They say the money should be given to the State Housing Authority to distribute to help homeowners avoid foreclosure.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
Rep. James Smith, D-Richland, said the settlement agreement clearly states if South Carolina does not give this money to help homeowners it will be inviting a lawsuit.
“I think we are setting ourselves up for getting sued again, and losing again,” Smith said.
Rep. Gary Simrill, R-York, said the State Housing Authority already has $295 million set aside to help homeowners avoid foreclosure -- so much money, he says, they might not be able to spend all of it. Whatever they don’t spend will go back to the federal government, he said.
Democrats attempted to move half of the settlement money back to the State Housing Authority Wednesday -- the third day of the House budget debate -- but Republicans easily defeated it.