Monthly Archives: April 2015


“Anti-inducement” regulations and broader reforms expected to cut title insurance closing costs up to 20 percent for new purchases, up to 60 percent for refinances

Governor Andrew M. Cuomo today announced new regulations to crack down on kickbacks and other improper expenditures (such as excessive meal and entertainment expenses) in the title insurance industry, which a Department of Financial Services investigation uncovered are significantly inflating title insurance premiums for consumers. These new regulations, together with broader reform measures, are expected to reduce title insurance closing costs by up to 20 percent for new home purchases and up to 60 percent for refinancing transactions.

“New Yorkers should not have to foot the bill for outrageous or improper expenses made by title companies just to refinance or close on their home,” Governor Cuomo said. “Our administration will not stand for that kind of abuse in the title insurance industry, and these new regulations will help ensure that New Yorkers are protected from unfair charges and get the most bang for their buck.”

Benjamin M. Lawsky, Superintendent of Financial Services, said, “Our investigation uncovered that title insurance companies paid for lavish meals and entertainment on the dime of consumers, which inflated premiums. These new reforms will help significantly reduce costs for homeowners by trimming the fat and making sure that New Yorkers get what they pay for in the title insurance industry.”

The regulation outlines categories of expenditures which, when provided as an inducement for title insurance business, are improper and violative of the New York Insurance Law. These expenditures include meals, entertainment, vacations and gifts that are provided to attorneys, real estate professionals, and others, who represent consumers and order title insurance on their behalf.

The investigation revealed that these types of expenditures are routinely made by title insurance corporations and agents in an effort to secure title insurance business. These improper expenditures have been included in the calculation of title insurance rates and have saddled New York consumers with excessive title insurance premiums for years. The regulation mandates that these improper expenditures, which violate the anti-inducement provision of the Insurance Law, be eliminated from the rates, thereby resulting in lower title insurance premiums.

Read on.



Widespread Effort by Bank Employees to Manipulate Benchmark Interest Rate Submissions for LIBOR, EURIBOR, TIBOR

Deutsche Bank Employee: This “is a corrupt fixing and DB is part of it!”

Deutsche Bank Employee Seeking to Obtain Lower Rate: “I’m begging u, don’t forget me… pleassssssssssssssseeeeeeeeee… I’m on my knees…”

Benjamin M. Lawsky, Superintendent of Financial Services, announced today that Deutsche Bank will pay $2.5 billion, terminate and ban individual employees who engaged in misconduct, and install an independent monitor for New York Banking Law violations in connection with the manipulation of the benchmark interest rates, including the London Interbank Offered Bank (“LIBOR”), the Euro Interbank Offered Rate (“EURIBOR”) and Euroyen Tokyo Interbank Offered Rate (“TIBOR”) (collectively, “IBOR”).

The overall $2.5 billion penalty Deutsche Bank will pay includes $600 million to the New York State Department of Financial Services (NYDFS), $800 million to the Commodities Futures Trading Commission (CFTC), $775 million to the U.S. Department of Justice (DOJ), and 227 million GBP (approximately $340 million) to the United Kingdom’s Financial Conduct Authority (FCA).

Superintendent Lawsky said: “Deutsche Bank employees engaged in a widespread effort to manipulate benchmark interest rates for financial gain. While a number of the employees involved in misconduct have already left the bank, those that remain are being terminated or banned from the New York banking system. We must remember that markets do not just manipulate themselves: It takes deliberate wrongdoing by individuals.”

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CFPB, Maryland AG take action against pay-to-play mortgage-kickback scheme

The Consumer Financial Protection Bureau and the Maryland Attorney General took action against the participants in a mortgage-kickback scheme, penalizing and banning several loan officers and title executives from the business.

In a complaint filed in federal court, the CFPB and Maryland allege that the Maryland-based title company’s executives and the named loan officers traded cash and marketing services in exchange for mortgage referrals. Under proposed consent orders filed today, if entered by the court, five of the six individual defendants would be banned from the mortgage industry and required to pay a total of $662,500 in redress and penalties.

The action will proceed against the remaining defendant.

The announcement follows enforcement actions in January against Wells Fargo and JPMorgan Chase for their role in the scheme.

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House Republicans Want To Block Predatory Lending Protections For American Troops

WASHINGTON — House Republicans are pushing legislation to block predatory lending protections for American soldiers, under pressure from the banking lobby.

GOP lawmakers tucked the deregulation item into the National Defense Authorization Act — a major bill setting the military’s funding, along with a number of other controversial terms on Guantanamo Bay and other issues. If the banking item is enacted, it would impose a one-year delay on new Department of Defense rules meant to shield military families from abusive terms on payday loans and other forms of high-interest credit. The bill is being considered Wednesday before the House Armed Services Committee.

The military has been struggling with the financial impact of predatory lending on service members for years. A 2014 report issued by the Consumer Financial Protection Bureau documents a host of abuses targeting troops. One family that took out a $2,600 loan ended up paying back $3,966.84 over the course of a year. Another borrower spent $1,428.28 to pay off a $485 loan in just six months. Thousands of service members receive short-term, high-interest loans each year.

In 2006, Congress passed legislation imposing a 36 percent cap on interest rates for payday loans, auto title loans and tax refund anticipation loans to military families. Lenders responded by slightly tweaking the terms of their loans to avoid the limits. Since the law applied to payday loans with terms of 91 days or less, and amounts of $2,000 or less, credit companies were able to shirk the rules with 92-day loans, or loans of $2,001.

Big banks were even more creative, issuing “deposit advance products” — functionally almost identical to payday loans, but with a different name and with effective annual interest rates of around 300 percent. Congress responded to these tricks in 2012 by passing another law directing the Pentagon to fix these loopholes, and new rules were finalized in September of last year.

The rules are strongly supported by consumer groups, including the Consumer Federation of America, Public Citizen and the U.S. Public Interest Research Group. Wednesday’s GOP bill would delay those rules for a year, ostensibly to allow for a new study to examine the effects of the rules. The CFPB has already performed two such studies.

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Congressman Investigated By Feds Now Gets Paid By Feds To Lobby Congress

The Congressional whores come out the woodwork…

WASHINGTON — A congressman who lost re-election amid a Justice Department probe of his financial dealings has resurfaced as a lobbyist on white collar crime issues — getting paid by that same Justice Department.

Former Rep. Alan Mollohan (D-W.Va.) came under scrutiny after a conservative watchdog group filed a 500-page complaint alleging that he created a string of nonprofit groups in West Virginia through which he steered millions of dollars in earmarked federal funds, enriching himself and his associates.

The Department of Justice closed the investigation without bringing any charges in 2010, several months before Mollohan lost his re-election bid. But a liberal watchdog group that had also targeted Mollohan, Citizens for Responsibility and Ethics in Washington, obtained the federal files from the case last year and found reams of damning testimony against him, leading CREW to declare that Mollohan should have been prosecuted.

Instead, he became a lobbyist. Heappears to have landed as a significant client the National White Collar Crime Center, based in West Virginia. That outfit bills itself as a nonprofit that “delivers training to thousands of law enforcement professionals in the areas of computer forensics, cybercrime, financial crime and intelligence analysis.”

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Quicken Sued By Feds Over Home Loans

WASHINGTON, D.C. (CN)- The United States’ second largest mortgage lender routinely approved loans that violated Federal Housing Authority rules, resulting in millions in losses for the federal government, the U.S. Justice Department claims.
Quicken Loans, Inc., is approved by the U.S. Department of Housing and Urban Development to underwrite mortgage loans under an FHA program designed to encourage home ownership by creditworthy low income families and first-time home buyers.
In a lawsuit filed in the Washington, D.C. Federal Court last week, the Justice Department says Quicken took advantage of its position and intentionally made exceptions to program rules in order to approve families who did not meet the criteria for a loan.
Approving more families for loans mean more profits for Quicken, the agency says. At the same time, however, any costs of default fell squarely on the shoulders of the federal government.
“Quicken established a culture that valued getting a loan approved and endorsed for FHA insurance over complying with FHA’s rules,” the complaint says. “Quicken’s aim was to get loans insured by the United States and sold for a profit – even when Quicken could not truthfully certify to FHA that the loan qualified for FHA insurance.”
Quicken management encouraged its underwriters to break HUD rules by allowing exceptions to underwriting requirements, requesting inflated appraisals, manipulating data, pressuring underwriters to approve loans faster, paying prohibited commissions to underwriters and encouraging underwriters to ignore risks evident in loan files, the Justice Department says.
The lender also had the FHA endorse loans that it knew violated FHA requirements, the complaint says.

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NY Lawmakers Want Banks Held Accountable For ‘Zombie Properties’

NEW YORK (CBSNewYork) — Officials are warning the foreclosure crisis in the boroughs isn’t over and are taking aim at so-called “zombie properties.”

Although many people might think the crisis is abating, there has actually been a sharp increase inabandoned and foreclosed homes in the last year, state Attorney General Eric Schneiderman said Monday.

“Last year in the Bronx there was a 45 percent increase in the number of ‘zombies,’”Schneiderman said.

Bronx state Sen. Jeff Klein is introducing a bill that would let homeowners stay in the homes as long as possible and hold the banks accountable for the disrepair.

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Ex-JPMorgan Employee Stole Customer Data, FBI Says

Law360, Los Angeles (April 28, 2015, 9:42 PM ET) — Federal prosecutors charged a former JPMorgan Chase & Co. employee with bank fraud, alleging he stole customer account information and used it to make unauthorized withdrawals, according to New York federal court filings.

The Federal Bureau of Investigation said during the course of its investigation, Peter Persaud sold customer bank information to an undercover agent through a confidential informant, according to a criminal complaint filed on April 20 and unsealed on Tuesday.

In November 2014, Persaud allegedly approached the FBI’s informant — who was not under…

Source: Law360

BofA Can’t Bleed Child Actor Trusts, Calif. Appeals Court Rules

Law360, Los Angeles (April 28, 2015, 9:48 PM ET) — A California appeals court on Monday revived a putative class action against Bank of America NA and ruled banks cannot pull service fees without court approval from so-called Coogan trusts, which are designed to protect the earnings of child entertainers.

Named plaintiffs Jasmine Phillips and Anesha Coleman had alleged the bank’s withdrawals from the trust accounts of their actor children, including withdrawals for monthly service fees, violate California law, which prevents withdrawals from the accounts by any person or entity without express court permission until a beneficiary…

Source: Law360

Wal-Mart to build 115 new China stores by 2017 in push to offset slowing growth

It makes you wonder if this is why Walmart closed the the recent 6 stores.. I just never believed the plumbing problem was the cause of closing the 6 stores and laying off employees…

Giant U.S. retailer Wal-Mart Stores Inc (>> Wal-Mart Stores, Inc.) plans to expand its footprint in China by nearly a third by opening 115 new stores by 2017, the firm’s chief executive said, in a renewed push to lure China’s grocery shoppers despite slowing growth.

“Our aim is to become an integral part of China’s economy,” Chief Executive Doug McMillon said at a news conference in Beijing on Wednesday. “China is a top priority.”

The development plans come as the U.S. retailer seeks to stave off slower growth in China, closing some under-performing stores and giving more emphasis to the faster-growing online grocery market through its platform.

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