Daily Archives: July 29, 2014

New legislative proposal would turn the post office into a bank

It’s been rumored and discussed for months, but now it’s one step closer to actually happening. The idea of theUnited States Postal Service offering banking services may have seem far-fetched when it was originally floated by the USPS earlier this year, but now there’s a legislative proposal that would authorize the USPS to do just that.

Last week, Representative Cedric Richmond (D-La.) followed through on a January white paper from the USPS’s Office of the Inspector General, which suggested that by allowing the post office to offer banking services, it could help communities that are currently underserved by banks.

In the white paper the USPS said, “postal financial services could complement the current offerings from banks by helping banks reach customers in geographic areas where they lack a physical presence, by offering products to customers who were not previously a main focus of banks, and by helping some customers transition to traditional bank savings or checking accounts.”

Read on.

1 in 3 Americans being chased by debt collectors

A new report form the Urban Institute shows how weak the U.S. economy is, and offers at least one reason for the housing doldrums – one in three Americans is so far behind in paying their bills that they are in collections.

An estimated 1 in 3 adults with a credit history — or 77 million people — are so far behind on some of their debt payments that their account has been put “in collections.”

That’s a key finding from a new Urban Institute study.

It examined non-mortgage debt, including credit card bills, car loans, medical bills, child support payments and even parking tickets.

The debt in collections ranged from as little as $25 to a whopping $125,000. But the average amount owed was $5,200.

Geographically, no area of the country is untouched.

Among the states, Nevada had the highest percentage of residents with debt in collections — 47% — as well as the highest average amount owed —7,198. That was helped in part by the Las Vegas metro area, where 49% of residents had debt in collections.

Source: CNN Money

“Operation Mis-Modification” Targets Foreclosure Relief Companies

The CFPB continues to ramp up its enforcement actions and its collaboration with state AG offices as part of the new “Operation Mis-Modification.”

The CFPB, the FTC and fifteen states announced a series of lawsuits against what they characterize as “foreclosure relief scammers.” The CFPB filed three lawsuits against individuals and companies – all law firms or associated with law firms – seeking compensation for victims, civil fines and injunctions. The FTC filed six lawsuits. And, in line with Director Cordray’s previous statements that the CFPB wascollaborating with state AG offices, the state AGs announced their intent to file 32 lawsuits. It is uncertain whether any of the state AG lawsuits will rely upon Section 1042 of Dodd-Frank, which, as we have previously reported, allows a state AG to bring a civil action for violation of the Dodd-Frank prohibition of unfair, deceptive or abusive acts or practices (UDAAP).

The CFPB alleges that the defendants used deceptive marketing to persuade thousands of consumers to pay them more than $25 million in illegal fees. The crux of the CFPB’s allegations are that these companies:

  • Charged consumers with advance fees before obtaining a loan modification in violation of Regulation O (formerly known as the Mortgage Assistance Relief Services Rule);
  • Misrepresented in marketing materials the likelihood they would help a consumer save substantial sums in mortgage payments;
  • Tricked borrowers into thinking that they would receive legal representation even though many borrowers never spoke with an attorney or had their case reviewed by one; and
  • Misled consumers to believe they were eligible for a loan modification or they would receive relief within a few short months when the defendants had not contacted the consumers’ lenders or requested or obtained any meaningful relief for them.

Read on.

CFTC: JPMorgan unit to pay $650,000 settlement

A JPMorgan Chase unit will pay $650,000 to resolve charges that it submitted inaccurate reports about the positions held by some of its large trader clients, the U.S. commodities regulator said on Tuesday.

Source: CNBC

Former AIG CEO Greenberg to Face Trial of Spitzer Suit After Nine Years

Maurice “Hank” Greenberg, the former chairman of American International Group Inc. (AIG), must face trial in January after nine years of legal jousting over former New York attorney general Eliot Spitzer’s lawsuit alleging sham transactions intended to inflate the insurer’s financial health.

The lawsuit, now pursued by New York Attorney General Eric Schneiderman, has been assailed by Greenberg as without merit.

A New York state judge in Manhattan set the week of Jan. 19 as the start of trial.

Read on.

Moses B. Garner: A banker with integrity

Moses B. Garner sold everything he had to pay back his bank customers.

Mr. Garner would not make it in today’s Wall Street environment and behavior… Moses B. Garner was a farmer, butcher, banker and San Bernardino, CA County Supervisor.

From Press Enterprise newpaper:

Moses B. Garner would have utterly failed in today’s Wall Street environment.

But as one of San Bernardino’s early bankers, Garner was a big success … twice.

In 1880, when his bank failed, instead of slipping quietly out of town or asking for a bailout, Garner paid his depositors back by selling most of his personal property, including his home.

It was a different time.

NY AG Schneiderman probes Credit Suisse’s ‘dark pool’

New York Attorney General Eric Schneiderman has launched an investigation into whether Credit Suisse misled investors in its “dark pool” trading platform, The Post has learned.

The investigation comes nearly a month after Schneiderman sued Barclays for allegedly lying about the presence of predatory traders lurking in its dark pool, an alternative trading system that is lightly regulated.

The UK bank has denied wrongdoing and last week filed a motion to dismiss the suit.

Credit Suisse is the operator of the largest bank dark pool in the US, accounting for about 14 percent of all trades, according to data from the Financial Industry Regulatory Authority.

Read on.