Daily Archives: July 16, 2015

CFPB releases first monthly snapshot of consumer complaint database

Report shows lenders trends in consumer complaints

Housingwire:

Today’s report provides complaint highlights as of July 1, 2015. Information includes:

Complaint volume: For June 2015, the most-complained-about financial product or service was debt collection, representing about 32% of complaints submitted. Of the 23,400 complaints handled, more than 7,400 of them were about debt collection. The second most-complained-about consumer product was mortgages, accounting for more than 4,700 complaints. Credit reporting, came in third, accounting for more than 4,300 complaints.

Product trends: Consumer loan complaints showed the greatest percentage increase from the same time last year, nearly doubling from approximately 660 complaints to 1,020 complaints on average per month.

State information: Hawaii, West Virginia, and Maine experienced the greatest complaint volume increases from the same time last year; with Hawaii up 41%, and West Virginia and Maine up 38%. South Dakota, Iowa, and Rhode Island experienced the greatest complaint volume decrease from the same time last year, with South Dakota down 40%, Iowa down 14%, and Rhode Island down 12%.

Most-complained-about companies: While company-level information should be considered in the context of company size, the top three companies that received the most complaints from CFPB for February through April 2015 were Equifax, Experian, and Bank of America. Equifax experienced the greatest jump in complaints over the same period last year, up 8%.

Experian, Equifax, BofA Top Chart For CFPB Gripes

Law360, Washington (July 16, 2015, 3:32 PM ET) — Experian PLC, Equifax Inc. and Bank of America drew more consumer complaints to the Consumer Financial Protection Bureau from February through April this year than any other company, the agency revealed in a first-of-its-kind report on Thursday.

The three financial services giants caught a combined 2,633 gripes to the watchdog agency over the period in question, with Equifax experiencing an 8 percent bump from last year. The complaints cover a variety of consumer issues, such as debt collection practices, consumer loans and credit reporting.

Source: Law360

Deutsche Bank probed by UK regulator for ‘laundering Russian cash’

Britain’s Financial Conduct Authority (FCA) has begun an investigation into whether Deutsche Bank breached anti money laundering laws for its Moscow clients, it has emerged.

The Financial Times reports the inquiry focuses on the bank’s so-called mirror trades executed in London and Moscow.

Deutsche Bank reported the matter itself to the FCA and Germany’s financial watchdog, BaFin.

The investment bank remains under “special measures” instigated by the FCA after several allegations of regulatory breaches.

Read on.

Germany Blasts Deutsche Bank Over Culture

German regulators accused a half-dozen current Deutsche Bank AG executives of failing to stop or tell regulators about years of attempted market manipulation, according to a confidential report reviewed by The Wall Street Journal that portrays the German bank as suffering from a badly broken corporate culture.

Read more: http://www.nasdaq.com/article/germany-blasts-deutsche-bank-over-culture-20150716-00918#ixzz3g5KALzxF

Eleventh Circuit: No Wrongful Foreclosure Claim Under Georgia Law Where Foreclosure Was Result of Borrowers’ Default

In Haynes v. McCalla Raymer, LLC, No. 14–14036, __ F. 3d __, 2015 WL 4188459 (11th Cir. July 13, 2015), the Eleventh Circuit Court of Appeals affirmed the Northern District of Georgia’s grant of summary judgment in favor of Bank of America, N.A. (“BANA”) on the mortgagors’ wrongful foreclosure claim. The court held that the mortgagors lacked standing to challenge any alleged deficiencies in the assignment of the security deed from MERS to BANA and that the borrowers’ own default, rather than any alleged defect in the foreclosure notice, led to the foreclosure.

With respect to the assignment of the security deed, the mortgagors claimed that “the security deed was facially defective and not fit for recording” because there was not an official witness to the assignment. They also claimed that signatures on the security deed were forged, thereby rendering the assigned deed a nullity. The Eleventh Circuit rejected these arguments outright on the basis that the borrowers lacked standing to challenge the assignment under Georgia law because they were not parties to the assignment and were not intended beneficiaries thereof.  The court further noted that, while security deeds must be notarized in order to be recorded, deeds with even patent defects in attestation are still binding between the parties.  The court explained that “the inability to record the deed impacts only subsequent purchasers of the property” who may acquire the property in good faith and without notice of other interests in the property. The court also pointed out that Georgia’s foreclosure statute only provided a “limited” protection to consumers, and does not even require that the security deed be recorded prior to foreclosure, only that it be “filed.”  See O.C.G.A. § 44-14-162(b).  The court therefore saw “no reason that the patent defect in attestation at issue here would provide [the mortgagors] with standing to challenge an otherwise effective, if not properly recordable, assignment of their security deed.”

Read on.

Consumers’ Changing Banking Habits Led To 1,400 Bank Of America Branches Shuttering, More Cuts To Come

Over the past several years, Bank of America has revamped the way it provides banking services in an effort to cut costs and respond to consumers’ changing banking habits. Those operation modifications have not only included shutting down some drive-thru windows, but the closure of nearly a fifth of the company’s branches.

Quartz reports that while many of those closures have occurred over the last five years, the bank warns that more of its 4,800 branches are likely to shutter in the future.

“We took 1,400 branches out of the system, which is bigger than some entire companies out there,” CEO Brian Moynihan said on a call with analysts. “We expect there to be more pressure downward.”

Moynihan says that the expected cuts would likely continue to be a reaction to customer behavior, noting that the number of mobile banking customers has grown to 17 million people in the past four years. Additionally, about 13% of the company’s checks are now deposited via the company’s mobile app, Quartz reports.

“We are moving because customers are moving in how they conduct business,” Moynihan said.

Read on.

Goldman Sachs in talks to settle DOJ probe into sales of mortgage securities before the crisis

Goldman Sachs Group Inc. reported second-quarter earnings that fell 49% from a year earlier on higher legal costs tied to a potential settlement of mortgage-related probes.

Net income dropped to $1.05 billion, or $1.98 a share, from $2.04 billion, or $4.10, a year earlier, the New York-based company said Thursday in a statement. Excluding the legal costs, earnings were $4.75 a share, beating the $3.96 average estimate of 24 analysts in a Bloomberg survey.

Goldman Sachs set aside $1.45 billion for litigation and regulatory proceedings this quarter, about five times more than a year earlier. The firm is in talks to be the latest major bank to settle a Justice Department probe into sales of mortgage securities before the financial crisis.

Read on.

Warren and Cummings Ask Financial Regulators About Risks to Banks and Taxpayers from Swaps Trading

Washington, DC – Today, United States Senator Elizabeth Warren and Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, sent letters requesting information from federal financial regulators about risks posed to taxpayers after last year’s partial repeal of Section 716 of the Dodd-Frank Act, which had been designed to prevent bailouts to banks and other financial entities with swaps holdings.

“Without this understanding, the country risks moving blindly toward the same financial meltdown that plunged the economy into recession seven years ago,” they wrote. “We believe that if these banks want continued access to federally insured deposit funds, they must be more transparent about the risks they are taking with that money.  If they want to keep secret the risks they are taking, these banks should forfeit access to taxpayer-backed FDIC insurance.  They can have access to taxpayer guarantees or they can keep big secrets, but they can’t do both.”

Earlier this year, Cummings and Warren sent letters requesting information from Bank of America, JPMorgan Chase, Citibank, and Goldman Sachs about how they planned to alter their swaps trading practices following the change to Dodd-Frank, which was included in the 2015 Appropriations legislation passed in December 2014.

The banks did not provide the information necessary to assess and understand the risks taxpayers now face, claiming it was proprietary information that must be withheld from Congress and the public. Click to read the responses from Bank of AmericaJPMorgan ChaseCitibank, and Goldman Sachs.

In today’s letters, Warren and Cummings asked financial regulators to provide the information the banks refused to make available, including the total value of derivatives contracts and swaps derivatives each institution holds for “hedging” and “risk management” purposes, as well as the total value of swaps transactions each institution would have “pushed out” under Section 716 as originally enacted.

Read the full letters sent today here:

Federal Reserve
Office of the Comptroller of the Currency
Commodity Futures Trading Commission
Federal Deposit Insurance Corporation

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Source: http://www.warren.senate.gov/?p=press_release&id=898

Clintons And Foundation Raked In Cash From Banks That Admitted Wrongdoing

Organization Foundation $ (Min.) Speaking Fees $ Total Dollars
Barclays 1,500,000 650,000 2,150,000
Credit Suisse 100,000 0 100,000
Deutsche Bank 500,000 750,000 1,250,000
GE Capital 525,000 225,500 750,500
HSBC 500,000 200,000 700,000
Jefferies LLC 0 425,000 425,000
JP Morgan 350,000 200,000 550,000
Standard Chartered 1,000,000 0 1,000,000
UBS 550,000 1,515,000 2,065,000

IBTimes:

On the campaign trail, Hillary Clinton is selling her version of economic populism, including calls for Wall Street executives who engage in financial wrongdoing to be held accountable more than they have been under President Barack Obama. She has pushed that message hard as she seeks to win support from the Democratic Party’s liberal base, with a speech Monday and a follow-up statement from her campaign the next day.

“Yesterday, Hillary said that when Wall Street executives commit criminal wrongdoing, they deserve to face criminal prosecution. Not a slap on the wrist, not a fine paid by their employers — prosecution,” said an email to supporters from Gary Gensler, a former Goldman Sachs executive-turned-government regulator now serving as a top Clinton campaign official.

Raking In Donations

Clinton’s outrage, though, did not stop her family’s foundation from raking in donations from many of the same banks that secured government fines rather than face full-scale prosecution. The Clinton Foundation has accepted $5 million worth of donations from at least nine financial institutions thatavoided such prosecution — even as they admitted wrongdoing. These include Barclays, HSBC and UBS, all of which entered into agreements with the Justice Department that allowed their employees to avoid criminal charges. The Clintons also personally accepted nearly $4 million in speaking fees from those firms since 2009.

Neither the Hillary Clinton campaign nor Clinton Foundation responded to International Business Times questions about why her family and their foundation accepted money from firms that settled financial fraud cases and avoided the kind of prosecution Clinton now says is needed.

HSBC under investigation by Saudi regulator for its role in a stock listing

HSBC Holdings PLC has come under investigation by regulators in Saudi Arabia for its role in a stock listing that has left investors nursing heavy losses and the bank’s chief executive cleaning up a fresh mess.

Saudi Arabia’s Capital Markets Authority, or CMA, in September suspended HSBC from conducting some asset-management activities and is investigating whether the bank’s Saudi unit inflated the valuation of a construction firm’s listing in 2008, according to three people familiar with the matter.

London-based HSBC’s brush with the regulator in Saudi Arabia, one of the world’s most promising new frontiers for foreign investors, marks another blow to a bank that has seen certain business practices run afoul of global authorities in recent years and its management criticized for a lack of oversight.

Read on.