In recent years, the U.S. Department of Justice has stepped up its use of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 to pursue civil enforcement actions against financial institutions and their employees. Most notably, the department used FIRREA to extract multibillion dollar settlements from major domestic banks as a result of their sale of residential mortgage-backed securities. The Justice Department’s focus has since turned to subprime auto lenders.

Originally published in Law360.