The nation’s largest banks and debt collectors are worried that if you learn what people are saying about them, you might like them less. And that wouldn’t be fair, they say.
The financial sector is fighting a Consumer Financial Protection Bureau proposal that would have the agency publish complaints submitted by people who feel they have been mistreated by a lender, debt collector or other financial institution. As it now stands, the agency publishes some small amount of information about the more than 290,000 complaints it has received from aggrieved consumers, but has refused to release the full narratives — essentially, the details.
Under the new policy, consumer names would be redacted and banks and other financial institutions would have a chance to publicly respond to or refute any allegations. People who file a complaint would have to opt in to having their narrative published on the CFPB’s website.
“This is what consumers want,” said Susan Grant, the director of consumer protection at the Consumer Federation of America, a nonprofit. “It gives them better ability to make decisions about what financial institution to choose.”
Yet the banks and other financial groups opposing disclosure argue that the CFPB approach would unleash a dangerous flood of misinformation that might promote the faulty sense that somehow they are not good corporate citizens. Consumers would also be confused by all the un-vetted information, they assert.
Law360, New York (September 29, 2014, 2:20 PM ET) — The U.S. Securities and Exchange Commission announced on Monday that it has charged two former Wells Fargo employees, a research analyst and a trader, with sharing information that yielded improper gains when it was traded on before the release of market-moving research reports.
Gregory T. Bolan Jr. and Joseph C. Ruggieri ran a scheme that generated $117,000 in profits when they, on at least six occasions, traded in stock before the release of reports that altered the stock’s value, the SEC said Monday.
“Instead of abiding…
Bank of America (>> Bank of America Corp) agreed to pay $7.65 million on Monday to settle civil charges alleging it miscalculated its regulatory capital for years, leading to an overestimate that eventually reached billions of dollars, U.S. regulators said Monday.
The bank said in April that it had discovered that it had overstated its capital levels by $4 billion, an error that caused the bank to suspend its plan to repurchase shares and raise its dividend for the first time since the financial crisis. The miscalculation stemmed from a portfolio of structured notes that the bank inherited as part of its 2009 acquisition of Merrill Lynch and went on until the bank found the error in April.
WASHINGTON — Michigan-based Flagstar Bank will be required to pay $37.5 million in restitution and fines over regulatory allegations it blocked struggling homeowners from receiving foreclosure relief, the Consumer Financial Protection Bureau said Monday.
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The regulator of Fannie Mae and Freddie Mac should require that banks and mortgage lenders obtain independent, third-party tests to ensure compliance with guidelines, according to a government watchdog report.
Neither Fannie nor Freddie “have routine, independent verification of counterparty compliance,” the Federal Housing Finance Agency Office of Inspector General said in a report to be released Friday.
As a result, the government-sponsored enterprises are exposed to greater risk of fraud and the misrepresentation of facts about properties, borrowers or loans, the report said.
Given the government’s failure to bring criminal cases against bankers and other Wall Street figures for collapsing the U.S. economy in 2008, it’s been left to the little guy to strike back.
To be precise, one federal jury in Sacramento, which acquitted four allegedly fraudulent mortgage borrowers of criminal charges after hearing testimony that the executives at their banks pulled out all the stops to make fraudulent loans for their personal profit.
We’re a bit late to this story–the verdict was handed up at the end of August, Salon’s Thomas Frank had a good analysis of the case a few weeks ago. But because of its potential significance for mortgage fraud prosecutions going forward, and because it happened in the federal district known for its aggressiveness in pursuing borrowers for mortgage fraud, the case is worth a closer look.
“The jury understood that these defendants were mice,” says William K. Black, a former litigation director at the Federal Home Loan Bank Board who oversaw the prosecutions of numerous savings-and-loan executives after that industry’s meltdown.
Black, who is associate professor of law and economics at the University of Missouri-Kansas City, was an expert witness for the defense in the Sacramento case. He may have delivered the key testimony blowing up the government’s contention that the defendants were the main fraudsters. His testimony was that executives at the lending institutions deliberately created a system to make fraudulent loans as a recipe for personal enrichment.