Daily Archives: December 26, 2014

Feds Bar Companies’ Long-Distance Lawsuits Against Soldiers

In the latest move against companies targeting military customers, federal regulators prohibit two Virginia-based lenders from suing out-of-state debtors in Virginia courts. The companies were featured in a ProPublica story in July.

Federal regulators reached a settlement last week with the owners of two high-priced lenders over what they alleged were illegal debt collection practices against service members. The Virginia-based companies were featured in a ProPublica story last summer.

The action by the Consumer Financial Protection Bureau, which enforces federal consumer laws, is the latest move by regulators and the Department of Defense to curb predatory practices by companies that target members of the armed forces around the country.

Schneiderman joins other AGs to tout fair housing act

New York Attorney General Eric Schneiderman and attorneys general from 16 other states plan to request today that the U.S. Supreme Court uphold longstanding interpretations of the U.S. Fair Housing Act related to racial discrimination. Schneiderman and the others will appear in an amicus brief before the court to discuss the “disparate impact” claims to housing policies that usually directly impact racial minorities. “The United States Congress passed the Fair Housing Act specifically to bring an end to residential segregation in America. Despite the progress we have made over the past several decades, we continue to see significant racial segregation in housing today. For that reason, we need every tool in our arsenal to achieve the goals of integration and equal opportunity for all,” Schneiderman said in a statement obtained by Capital New York.

– See more at: http://therealdeal.com/blog/2014/12/24/schneiderman-joins-other-ags-to-tout-fair-housing-act/#sthash.3S1CJAOw.dpuf

Ocwen faces ‘massive future fines,’ shareholder says in suit

Ocwen shares have plunged in the past year as a result of an “anything goes” business culture and rampant conflicts of interest, a shareholder alleges in a suit filed this week.

The civil suit, filed Tuesday in U.S. District Court for the Southern District of Florida, names as defendants Ocwen Chairman William Erbey, Chief Executive Ron Faris, major shareholder Barry Wish and three other Ocwen executives. Plaintiff William A. Sokolowski of New Jersey alleges breach of fiduciary duty and unjust enrichment.

Read on.

JIM HIGHTOWER: Citigroup becomes its own lawmaker

Congress, which has long been so tied up in a partisan knot by right-wing extremists that it has been unable to move, suddenly sprang loose at the end of the year and put on a phenomenal show of acrobatic lawmaking.

In one big, bipartisan spending bill, our legislative gymnasts pulled off a breathtaking, flat-footed backflip for Wall Street, and then set a dizzying new height record for the amount of money deep-pocketed donors can give to the two major political parties. It was the best scratch-my-back performance you never saw. You and I didn’t see it – because it happened in secret.

The favor was huge – allowing Wall Street’s most reckless speculators to have their losses on risky derivative deals insured by us taxpayers. Yes, such losses were a central cause of the 2008 financial crash and subsequent unholy bank bailout, which lead to passage of the Dodd-Frank reform law, including a provision sparing taxpayers from covering future losses. But with one, compact, 85-line provision inserted deep inside the 1,600-page, trillion-dollar spending bill, Congress did a dazzling flip-flop on that regulation, putting us taxpayers back on the hook for the banksters’ high-risk speculation.

In this same spending bill, Congress also used its legislative athleticism to free rich donors (such as Wall Street bankers) from a limit of under $100,000 on the donation that any one of them can give to political parties.

In a spectacular gravity-defying stunt, lawmakers flung the limit on these donations to a record-setting 15 times higher than before. So now bankers who are grateful to either party for being able to make a killing on taxpayer-backed deals can give $1.5 million dollars each to the parties.

Perhaps you recall from your high school civics class that neat, one-page flow chart showing the perfectly logical, beautifully democratic process that Congress must go through to pass our laws.

What a bunch of kidders those chart makers were! To see how the sausage is really made, let’s take a look at that trillion-dollar budget bill that Congress squeezed out just before Christmas.

It was crammed with special corporate favors, such as: reinstating a Bush rule allowing mining giants to explode the tops off ancient Appalachian mountains and then bulldoze the rubble down into the valley below destroying pristine mountain streams; another letting long-haul trucking outfits require their drivers to be on the road more than 11 hours a day and up to 82 hours per week, filling our highways with highballing, sleep-deprived truckers; and cutting $60 billion from the Environmental Protection Agency, freeing up polluters to go unpunished for polluting.

Read on.

States Wield New Weapon Against Banks — Courtesy of Dodd-Frank

Over the past 16 months, a growing number of states have taken action against banks and consumer finance companies for violations of Dodd-Frank’s prohibition of unfair, deceptive or abusive acts or practices. The attorneys general for New Mexico, Illinois, Mississippi, Connecticut and Florida, as well as New York’s Department of Financial Services, have used their Dodd-Frank authority to assert civil claims alleging violations of UDAAP and other federal regulations in at least 12 different actions.

The states’ targets included national banks, an auto lender, student lenders, a payday lender and a credit monitoring agency. It is unclear, however, if the wave of state actions signals a burgeoning state scrutiny of consumer finance companies or if state enforcers will only employ this new approach on occasion.

Read on.

Morningstar: True cost of Ocwen settlement far exceeds $150 million

If Ocwen Financial (OCN) thought that its regulatory troubles were over now that it settled with the New York Department of Financial Services for $150 million, the beleaguered company has another thing coming, according to Morningstar.

In a note to clients, Morningstar analysts say that the real cost of the NYDFS settlement will definitely be more than the $150 million Ocwen must pay to homeowners in New York.

In Morningstar’s analysts’ opinion, Ocwen’s real losses may be the loss of soon-to-be former chairman William Erbey, who is being forced to resign as part of the NYDFS settlement, as well as settlement terms that require ongoing monitoring of corporate governance and a ban on acquiring mortgage servicing rights until certain process and technology improvements are implemented to the satisfaction of the NYDFS.

“The real cost of compliance with the terms will undoubtedly be greater than the $150 million stated in the settlement and is likely to slow or altogether halt any long-term growth for Ocwen,” Morningstar’s analysts said.

Read on.

Wells Fargo sued over subprime securities

Wells Fargo (WFC) and several other top banks were sued by Phoenix Light SF, which claimed the banks failed to protect investors in their role as trustees of securities backed by home loans that defaulted after the 2008 credit crisis.

HSBC Holdings (HSBC), Bank of New York Mellon (BK) and Deutsche Bank AG (DB) were also included in the lawsuit.

The Irish securities firm accused the banks, in complaints filed earlier this week in Manhattan federal court, of failing to safeguard the interests of investors as required by their contracts. The securities were sold from 2005 to 2007.

Source: Bloomberg