Court rules Wells Fargo subject to penalty on foreign tax credits

NEW YORK (AP) — A federal court has ruled that Wells Fargo is liable for a negligence penalty in a tax case that involved foreign tax credits, but the bank prevailed in another part of the case that could mute any payment.

The case involves Structured Trust Advantaged Repackaged Securities, or STARS.

Wells Fargo said the structure exempted it from tax, which the IRS disputed. A jury ruled last year that Wells Fargo’s STARS were two products, a loan and trust. The trust was ruled to be simply for tax purposes, while the loan was not.

A court found Wells liable for a 20 percent penalty Wednesday tied to tax credits, but also that it could deduct interest expenses from the loan.

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Could Wells Fargo’s scandal boost mortgage discrimination lawsuits? L.A., other cities hope so

A recent Supreme Court decision that will allow mortgage discrimination cases against Wells Fargo and other banks to proceed is more than just another bad headline for the San Francisco financial giant.

As those cases progress, they represent yet another way that the bank’s practice of opening unauthorized accounts for customers could come back to haunt it.

Attorneys for the cities of Philadelphia and Oakland are arguing that the unauthorized accounts scandal — and the bank’s own admissions as to what caused it — bolsters their claims that Wells Fargo improperly steered black and Latino home buyers into pricier mortgages than white buyers.

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Wells Fargo Must Fully Compensate Victims in Account-Scandal Settlement

SAN FRANCISCO (CN) – Wells Fargo must guarantee full compensation and credit history repairs for an estimated 2.73 million victims of its sham accounts scandal before a judge will approve a proposed $142 million settlement.

U.S. District Judge Vince Chhabria laid out his conditions for approving the deal in a ruling Wednesday night, less than one week after several lawyers urged him to reject the settlement during a May 20 hearing.

The class action settlement in Jabbari v. Wells Fargo would release the bank from liability over its employees opening an estimated 3.5 million unauthorized accounts and lines of credit from 2002 to 2017 to meet aggressive sales goals.

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California district court upholds constitutionality of CFPB

A U.S. district court judge in the Central District of California defended the constitutionality of the Consumer Financial Protection Bureau after rejecting multiple challenges to the bureau’s authority to issue civil investigative demands (CID),according to a blog by James Kim and Daniel Delnero, published in the CFPB Monitor.

The decision comes amid a growing amount of cases disputing the constitutionality of the bureau, which includes the landmark case between the CFPB and PHH that started oral arguments this week.

The blog explained that the judge ordered the defendant, Future Income Payments, to comply with a CID within fifteen days of the decision after the company previously attempted a John Doe challenge to the CID in the U.S. District Court for the District of Columbia.

From the blog:

The opinion is a reminder of the CFPB’s broad authority to issue a CID and the heavy burden a recipient bears of challenging it. The court joined other courts in emphasizing that an agency subpoena is valid unless jurisdiction is “plainly lacking.” Under this standard, a CID will be upheld if “there is some plausible ground for jurisdiction.”

Constitutional issues aside, the primary takeaway is that companies should think strategically when they receive a CID.

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Republicans want to leave you more voicemail — without ever ringing your cellphone

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For years, consumers have warred with telemarketers for ringing their landline phones at all hours of the day.

Pretty soon, though, they might find their mobile voicemail under the same sort of assault — that is, if the U.S. Republican Party and others have their way.

The GOP’s leading campaign and fundraising arm, the Republican National Committee, has quietly thrown its support behind a proposal at the Federal Communications Commission that would pave the way for marketers to auto-dial consumers’ cellphones and leave them prerecorded voicemail messages — all without ever causing their devices to ring.

Under current federal law, telemarketers and others, like political groups, aren’t allowed to launch robocall campaigns targeting cellphones unless they first obtain a consumer’s written consent.

 But businesses stress that it’s a different story when it comes to “ringless voicemail” — because it technically doesn’t qualify as a phone call in the first place. In their eyes, that means they shouldn’t need a customer or voter’s permission if they want to auto-dial mobile voicemail inboxes in bulk pre-made messages about a political candidate, product or cause. And they want the FCC to rule, once and for all, that they’re in the clear.

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Wells Fargo scandal may force New York City to find new bank

City rules may require New York to yank its deposits from Wells Fargo, one of 20 banks approved to hold the city’s cash.

A commission is set to meet next week to decide which banks are approved for city deposits for the next year — and advocates point to the city’s own rules to argue officials are legally required to bump the embattled bank from the list.

Wells Fargo — embroiled in a scandal over the creation of up to 2 million fake accounts — was knocked down to a “needs improvement” rating by federal regulators in March under the Community Reinvestment Act, citing an extensive pattern of discriminatory and illegal lending practices.

New York City rules say that in order to be designated to get government deposits, a bank must have at least a “satisfactory” rating.

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Citigroup Agrees to $97.4 Million Settlement in Money Laundering Inquiry

But no jail time…

For years, Citigroup employees feared that millions of dollars the bank was moving to Mexico might be suspicious. Yet in many cases, the bank did not alert regulators or step up its monitoring for money laundering, federal prosecutors said Monday.

Even as the Citigroup unit Banamex USA was growing to dominate remittances from the United States to Mexico, the bank did not properly safeguard its systems from being infiltrated by drug money and other illicit funds, prosecutors said.

On Monday, Citigroup agreed to pay $97.4 million in a settlement after a long federal investigation into Banamex USA. In exchange, the Justice Department will not file criminal charges against the bank in connection with inadequate oversight of Banamex USA, which is based in California.

As part of the agreement, Banamex USA “admitted to criminal violations by willfully failing to maintain an effective anti-money-laundering” compliance program, the Justice Department said.

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