Obama DOJ uses bank settlements to fund third-party housing organizations without congressional appropriation

The Obama administration's Department of Justice began directing mortgage settlement funds from major banks to third-party housing and community organizations as part of its National Mortgage Settlement and subsequent agreements with Bank of America, Citigroup, and others. Conservative legal scholars and House Republicans argued these arrangements used the Judgment Fund and settlement authority to fund programs Congress had not appropriated money for — an executive end-run around the Appropriations Clause. The practice drew a formal GAO inquiry and set the contested precedent the Trump administration cited in 2026 when creating the Anti-Weaponization Fund.