Banks Face Key Hurdle in Libor Fight
Banks suspected by regulators around the world of manipulating interest rates are trying to escape another mire: more than 30 lawsuits filed by borrowers, lenders and other plaintiffs who claim they were cheated by the same financial institutions.
Next week, lawyers for Barclays BARC.LN +1.51% PLC, Royal Bank of Scotland Group RBS.LN +2.84% PLC, UBS AG UBSN.VX -0.33% and more than a dozen other banks still under investigation are expected to ask a federal-court judge to throw out many of the suits, which seek class-action status.
The suits, filed in civil court in California and New York by plaintiffs ranging from a retired cable-car driver in San Francisco to the city of Baltimore, have been piling up for nearly two years. They seek damages that could reach into the tens of billions of dollars from financial institutions that help determine the London interbank offered rate, or Libor. Barclays, RBS and UBS already have paid about $2.5 billion, and admitted wrongdoing, to settle rate-rigging allegations by U.S. and U.K. regulators.
Bank of America should just play the tape of disputed sales call
A customer says he never authorized BofA by phone to enroll him in a costly credit card protection service. The bank says he did, but refuses to provide proof.
It’s perhaps not so surprising that a Bank of America customer discovered recurring payments on his credit card bill for a service he swears he never signed up for. This kind of thing happens a lot.
What is surprising is that BofA told the customer to pound sand when he requested proof that he authorized the bank by phone to enroll him in its Credit Protection Plus program, which came with a $212.50 monthly charge.
BofA’s stance: Trust us, we’re right. We have nothing to prove.
This didn’t sit well with Craig Chatfelter, 60, of Lake Hughes after he realized he’d paid more than $4,000 in Credit Protection Plus charges over 19 months — and, yes, he blames himself in part for not having kept closer tabs on his card statements.
“When you phone Bank of America, they say they record all calls,” he told me. “OK, so play me the tape. Show me the proof that I really signed up for this.
Banks’ time for remorse is not over, says incoming Governor of the Bank of England Mark Carney
Banks must do more to regain public trust, including more radical reform to the way they run their businesses, according to Mark Carney, the incoming Governor of the Bank of England.
Mr Carney said banks needed to “participate actively in reform, not fight it”, as he argued that bankers had to “see themselves as the custodian of their institution”.
“Until recently, too few bankers acknowledged their industry’s role in the fiasco. The time for remorse is far from over,” said Mr Carney.
Speaking in his native Canada, where he is currently seeing out his term as governor of the Bank of Canada, Mr Carney said banks still needed to raise more capital as well as undertaking more regular stress tests to assess their ability to weather a new crisis.
Infamous Bain case in Washington works in MERS favor again
The well-known Bain v. Metropolitan Mortgage Group court decision out of Washington state has failed once again to give homeowners the slam-dunk case against MERS that some initially interpreted when the opinion was released last year.
Judge Marsha Pechman with the U.S. District Court of the Western District of Washington ruled this week that “bare legal conclusions are not sufficient to uphold” a claim that a borrow originally made against MERS under Washington state laws.
Essentially, the court said in the Zalac v. CTX Mortgage Corp. case that a foreclosure sale actually has to occur for someone to be able to make a claim on the grounds that a lender has violated Washington’s Deed of Trust Act and state consumer protection laws.
Grand jury indicts California man for interferring with foreclosures
A California man has been accused of running a scheme to prevent banks from foreclosing on properties.
Walter Bruce Harrell of Montara, Calif., has been indicted by a federal grand jury on charges of bankruptcy fraud and making false statements in bankruptcy proceedings, the Office of the Special Inspector General of the Troubled Asset Relief Program and the U.S. Attorney for the Northern District of California said Friday. Many of the creditors that were prevented from foreclosing were banks that had received Tarp funds, the special IG said.
Housing caught in the wake of sequester debates
Congress must reach a decision by March 1 to avoid automatic spending cuts that are part of the budget sequester. An alarming concern is that the mandatory $86 billion in spending cuts could stifle the economic and ongoing housing recovery.
As of now, numerous experts are calling for a few housing-related changes, including adjustments to the mortgage-interest deduction.
Acting Secretary Neal Wolin of the U.S. Department of Treasury spoke before the Chicago Council on Global Affairs Monday, noting the economy has made great progress, especially in sectors such as housing, but going forward this progress will be tested.