CINCINNATI (CN) – Fifth Third Bank allowed auto dealers to hike interest rates on car loans to black and Hispanic buyers, the Justice Department claims in a lawsuit.
According to a complaint filed in Federal Court on Monday, the bank’s policy was done “in a hidden manner not based on the borrower’s creditworthiness or other objective criteria related to borrower risk.”
The lawsuit says the bank’s policy was done “in a hidden manner not based on the borrower’s creditworthiness or other objective criteria related to borrower risk.”
An investigation by the Consumer Financial Protection Bureau revealed the policy has been in effect as far back as 2010.
The agency says Fifth Third’s “lack of compliance monitoring” meant “the average African-American victim was obligated to pay over $200 more during the term of the loan because of discrimination, and the average Hispanic victim was obligated to pay over $200 more during the term of the loan because of discrimination.”
Housing advocates have attracted a prominent ally in their push to change the federal government’s policy of selling distressed mortgages at a discount to private equity firms and hedge funds.
Senator Elizabeth Warren, Democrat of Massachusetts, joined other lawmakers, advocates and community activists on Wednesday in a Washington rally to oppose the loan sale program.
The senator called on the Department of Housing and Urban Development and the Federal Housing Fianance Agency, the overseer of Freddie Mac and Fannie Mae, to make it easier for nonprofit organizations to bid for the bundles of distressed mortgages put up for auction.
CFPB is under attack by Congress!
The House Financial Services Committee is considering several bills to change Wall Street reform today, including changing the Consumer Financial Protection Bureau, a move the White House is quick to fight back on.
Jeffrey Zients, director of the National Economic Council and Assistant to the President for Economic Policy,published a blog on the White House’s website, trying to refute any plan to change the CFPB, along with two other deals on the table.
These bills include efforts at the behest of Wall Street to undermine the people’s watchdog — the Consumer Financial Protection Bureau (CFPB); an attack on American families’ retirement security by blocking the proposed Conflict of Interest Rule; and a step backward on transparency and accountability for public firms’ CEO compensation.
The main issue related to housing that the blog addresses is running the CFPB by Commission.
Today, the Committee is considering a provision to install a commission structure at the CFPB, instead of a Director. Opponents of the CFPB view a commission structure as a maneuver designed to tie the CFPB in knots, limiting the Bureau’s effectiveness. Congress designed the CFPB to respond rapidly to changing market conditions and to react quickly to new threats to consumers and determined the CFPB would operate most effectively with a single leader.
Richard Cordray, director of the CFPB, sat in front of the House Financial Services Committee for his semi-annual report Tuesday morning, facing attacks from Republicans and paeans from Democrats.
Now one day later, the White House is showing where it stands on the issue.
A government program launched following last decade’s mortgage crisis to help struggling homeowners has mostly helped banks and hedge funds, and not Americans in danger of losing their houses.
Five years ago, the Department of Housing and Urban Development (HUD) launched a mortgage sales program called the Distressed Asset Stabilization Program (DASP) so it could unload teetering mortgages to the private sector.
DASP was supposed to not only help HUD improve its finances, but also assist homeowners facing the risk of foreclosure work out new terms with the banks or hedge funds buying the mortgages. But things haven’t worked out that way for the vast majority of homebuyers.
DASP has resulted in more than 98,000 mortgages—representing more than $16.7 billion in total debt—being sold to investors “at times as little as 41 percent of the mortgages’ collective value,” the Center for Public Integrity reported. The struggling Federal Housing Administration, which insures mortgages, became solvent as a result of the sales. However, only 16.9% of the mortgages sold between 2010 and 2014 avoided foreclosure.
Law360, New York (September 29, 2015, 1:33 PM ET) — Wall Street regulators on Tuesday slammed a UBS affiliate in Puerto Rico with orders to pay $33.5 million to settle claims that it failed to supervise a representative who allegedly misled investors into using borrowed money to buy up closed-end bond funds offered by the broker-dealer.
According to the SEC, a representative for a UBS affiliate in Puerto Rico engaged in a $2.8 million scheme by misleading investors. (Credit: AP) Claims were brought by the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority….
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Law360, Los Angeles (September 29, 2015, 9:50 PM ET) — JPMorgan will have to face a class of potentially hundreds of thousands of investors accusing the bank of misleading them about the riskiness of derivatives trading before the $6 billion “London Whale” trading fiasco, a New York federal judge ruled Tuesday.
A New York federal judge shrugged off on Tuesday JPMorgan’s contentions that some of the class members who bought their shares after the bank partially disclosed some losses were differently situated. (Credit: AP) The investors, led by a group of retirement funds, won their bid…
It’s about time!
The city of San Francisco is moving to combat its rapidly rising housing costs with a new plan that will offer more moderately pricing housing in exchange for allowing builders to exceed the city’s current building height restrictions.
According to a report from the San Francisco Chronicle, San Francisco Mayor Ed Lee is set to propose a plan to encourage the building of more affordable housing in the city.
From the Chronicle:
Neighborhoods across the west side of San Francisco could see thousands of new housing units under a measure Mayor Ed Lee is proposing that would allow builders to exceed current height restrictions in exchange for including more affordable units.
The affordable housing bonus program, which will be introduced at the Board of Supervisors Tuesday, would allow an extra two stories of height on projects that include 30 percent affordable units and an extra three stories on 100 percent affordable developments.
Unlike state and federal affordable housing programs, the measure is primarily directed at encouraging builders to provide units for middle-income families rather than low-income. It calls for 18 percent of the units to be affordable to families making between 120 and 140 percent of area median income, which is $122,000 to $142,000 for a family of four. The remaining 12 percent would cater to low- to moderate-income people.
And with San Francisco housing looking potentially bubblicious, more affordable housing can’t come soon enough.
Two federal agencies on Tuesday requested that the Obama administration postpone General Electric’s plan to end its cleanup of the Hudson River without removing all the related pollution. While GE has saidit is satisfied with its cleanup and is consequently shuttering its dredging operations this year, the Department of the Interior and the National Oceanic and Atmospheric Administration (NOAA) said in a letter that GE’s current plan would leave fish in the river “unacceptably contaminated” with the toxic chemicals called PCBs that the company spewed into the river decades ago.
“Now is the time for GE to thoroughly address its PCB contamination of the Hudson River,” the agencies wrote to the Environmental Protection Agency, which has cited data to label PCBs “probable human carcinogens.”
The EPA forged an agreement in 2002 with GE to clean up some of the PCBs that the company’s Upstate New York manufacturing facilities deposited in the river in the mid-20th century. Under that agreement, EPA must approve GE’s decommissioning plan in what has become the nation’s largest Superfund site. Interior and NOAA assert that if the EPA approves GE’s plan to decommission its dredging facilities, it would remove equipment that would have to be redeployed if the agencies later require GE to do more dredging.
We heard this story before.. Wells Fargo still is repeated offender in redlining…Court document is linked to the article…
Oakland is accusing Wells Fargo Bank of systematic predatory lending to minorities.
In a federal lawsuit filed last week, the city alleges that the bank targeted blacks and Latinos, steering them toward risky, likely-to-fail loans — the kind that caused many families to lose their homes in the ongoing foreclosure crisis.
Oakland City Attorney Barbara Parker says the city has collected proof, including the testimony of former Well Fargo employees, suggesting the bank intentionally gave more expensive loans to African-American and Latino residents. Parker says minorities with good credit were given bad loans, in contrast to loans given to white borrowers with the same credit and income.
“Some of the testimony that we have gotten indicates that they felt that these borrowers were less sophisticated,” Parker says. “In some cases there’s comments that they thought they were less intelligent. It’s hard to imagine that being the case today, but in effect that’s what happened over years.”
Washington D.C.–(Newsfile Corp. – September 29, 2015) – The Securities and Exchange Commission today charged UBS Financial Services Inc. of Puerto Rico and a former branch manager for failing to supervise a former broker who had customers invest in UBSPR affiliated mutual funds using money borrowed from a UBSPR affiliated bank. UBSPR and the bank prohibited using such loans to purchase securities and the practice exposed investors to losses while producing profits for the former UBSPR broker, the SEC alleged.
UBSPR agreed to settle the SEC’s charges by paying $15 million in disgorgement, interest, and penalties, which will be placed into a fund for harmed investors. The former branch officer, Ramiro L. Colon III, agreed to a settlement in which he will pay a $25,000 penalty and be suspended from a supervisory role for one year.
Posted in Uncategorized
Tagged SEC, UBS