The Financial Institutions Reform, Recovery, and Enforcement Act has seen a resurgence lately, as financial institutions find themselves targeted by the Department of Justice based on conduct that occurred during the recent financial crisis. Indeed, the DOJ has filed more FIRREA actions in the past few years than it did in the first 20 years of the statute’s existence.
The law was originally passed in 1989 to protect financial institutions against fraud in the context of the savings and loan crisis. Now, FIRREA is being used in ways not contemplated more than two decades ago and has become a powerful tool for the DOJ — raising troubling questions about its recent application.
