More than 1 million borrowers defaulted on their student loans last year

Even as the economy continues to improve, student loan borrowers are still struggling to cope with their debts, a new analysis indicates.

Roughly 1.1. million borrowers entered default on their Direct Loans, a type of federal student loan, last year, about the same as the previous year, according to an analysis of publicly available government student loan data by Rohit Chopra, a senior fellow at the Consumer Federal of America, a network of more than 250 nonprofit consumer groups. Overall, there were 4.2 million borrowers in default in 2016, up 17% from 3.6 million the year before, as some borrowers exited default while others remained in the red.

The analysis likely underestimates the number of federal student loan borrowers in default as it doesn’t account for borrowers who are in default on types of federal student loans other than Direct Loans.

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CFPB fines Experian $3 million for lying about consumers’ credit scores

Experian, one of the nation’s three major credit reporting bureaus, misled consumers by telling them that the credit scores they purchased from the company were the same ones that lenders used to make credit decisions, the Consumer Financial Protection Bureau said Thursday.

And for that deception, the CFPB is fining Experian $3 million.

According to the CFPB, Experian developed its own proprietary credit scoring model, which it calls the “PLUS Score.” Experian then took that “PLUS Score” and applied it to information in consumer credit files to generate a credit score it offered directly to consumers.

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A German Bank Accidentally Transferred $5.4 Billion to Four Other Banks

Germany’s state-owned development bank KfW, which gained publicity for erroneously transferring hundreds of millions of euros to Lehman Brothers Holdings Inc. the day the U.S. firm filed for bankruptcy, has done it again.

KfW in February mistakenly transferred more than 5 billion euros ($5.4 billion) to four banks because of a technical glitch that repeated single payments multiple times, according to people familiar with the matter. The total amount transferred was as high as about 6 billion euros, said one of the people, who like the others asked not to be identified because the matter is private.

“KfW has detected the system’s incorrect behavior very early in the process, immediately mitigated the unwanted action and started the necessary process of analyzing the causes,” the bank said in an emailed statement. “The mistake was rapidly identified and eliminated, and the amounts overpaid were successfully demanded back. We regret that during works on the systems, this incident could happen due to human error owing to a configuration mistake.”

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Wells Fargo Accused of Sacrificial Firings After Fine

TRENTON, N.J. (CN) – Fired in the wake of Wells Fargo’s mortgage-kickback scandal, nine former staffers claim in court that the supervisors who instructed the illegal activity kept their jobs. 

The lawsuit in Mercer County Superior Court comes just over two years after Wells Fargo paid $35.7 million to settle charges by the Consumer Financial Protection Bureau.

Regulators said that Wells Fargo’s loan officers were accepting cash and other kickbacks in exchange for referrals from General Title, a realty title insurance company that shuttered in 2014.

Led by Egg Harbor resident Jeffrey Bellak, nine former Wells Fargo home-mortgage consultants from that era say the kickback practices were standard operating procedure, and that Wells Fargo switched to a new title company in 2013.

“Having paid an enormous fine for its illicit ‘leads’ arrangement with Genuine Title, and having pledged as part of the settlement to desist, Wells simply discontinued its relations with Genuine and substituted Patriot Land Title,” the March 6 complaint states.

Bellak and the other fired officers say Wells Fargo chose them randomly as sacrificial lambs a few months after settling with the CFPB.

“In order to create for the CFPB the false appearance of having pursued a true internal investigation, resulting in the removal of all personnel responsible for the prior violations, [Wells Fargo] arbitrarily selected the plaintiffs for termination,” the lawsuit states.

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 Trump’s SEC Nominee Has a Major Conflict-of-Interest Problem

Jay Clayton is tied to big banks and corporations—and that could hold up fraud enforcement.

The dominant theme of Thursday’s Senate Banking Committee hearing with Jay Clayton, nominee for chair of the Securities and Exchange Commission, was conflict of interest. Not the well-documented conflicts of some of the more notorious members of the Trump administration but the conflicts of Clayton himself.

A partner at the high-powered corporate law firm Sullivan & Cromwell, Clayton represented Wall Street banks throughout his career. He served as Goldman Sachs’s lawyer during the Wall Street bailout, allowing it to emerge from the financial crisis relatively unscathed. He helped deliver failed investment bank Bear Stearns to JPMorgan Chase and other failed investment bank Lehman Brothers to Barclays. Hedefended Ally Financial in its foreclosure fraud settlement with the government and represented Deutsche Bank in its “mirror trade” Russian oligarch money laundering scandal. He was the lawyer of record with mortgage servicer Ocwen during a scandal so distasteful the CEO was forced to resign. Oh yeah, also his wife is a broker at Goldman Sachs. (She reportedly plans to step down upon Clayton’s confirmation.) Matt Taibbirightly suggested that Clayton would be “the most conflicted SEC Chair ever,” and given the history of SEC chairs, that’s saying a lot.

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Trump Administration Conflicts? Former Anthem Lobbyist To Oversee Antitrust Division: Report

A former top lobbyist for Anthem will be the next head of the Justice Department’s antitrust division, according to two reports citing officials familiar with the matter. Makan Delrahim served as one of the healthcare conglomerate’s top lobbyists working on antitrust issues as the company pushed the Justice Department to approve its controversial proposal to merge with Cigna.

Delrahim would head the office that Anthem is pushing to approve the merger, which physicians and consumer groups say could raise healthcare prices and reduce medical coverage for up to 53 million Americans. Delrahim’s impending appointment was first reported by Reuters and the Wall Street Journal.

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Trump reportedly considering former OneWest CEO to lead OCC

President Donald Trump is reportedly close to installing another former top OneWest Bank official in a significant role in the government, CNBC reported Tuesday.

According to the report, the Trump administration is “expected to name” Joseph Otting to serve as the Comptroller of the Currency, one of the country’s top financial regulators.

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