A Massachusetts appeals court ruled in favor of a Newton law firm on Tuesday in a lawsuit over its handling of a mortgage foreclosure, even though the three-judge panel agreed with the woman who sued the firm that the firm’s actions were “troubling.”
The woman, Devenia Mack, accused Harmon Law Offices PC of scheduling a foreclosure sale of her property even though a court had issued a preliminary injunction preventing such a sale. Harmon also allegedly failed to advise a real estate auction company that it could not advertise the foreclosure sale and communicated with Mack directly even knowing she was being represented by another lawyer.
WASHINGTON — Congressional negotiators working on a bipartisan highway funding bill may include a controversial provision that would undercut new mortgage rules, according to sources close to the talks.
Negotiators are also discussing measures that would help a troubled for-profit college company avoid bankruptcy, as well as enable a single New York bank to sidestep a requirement in the 2010 Dodd-Frank financial reform law.
A highway funding bill may seem an odd vehicle for arcane financial services policy, but the riders reflect the recent reality that Congress passes very little legislation. Bipartisan bills with broad support can become incubators for unrelated and at times, highly-targeted, legislative favors. Other lawmakers and the president are reluctant to spoil a package over such provisions when bipartisan accomplishments are so rare.
The highway bill would ensure years of federal funding for the nation’s roads and bridges. Hardline conservative groups have opposed it, but versions of the bill have cleared both the House and Senate. Negotiators from both parties are now hammering out a final bill, and sources say three financial services riders are currently in the package, although the precise details of one measure are still being negotiated. The final legislation could, of course, change in the coming days.
It’s only November, but if Wall Street gets its way, Christmas could come early for the industry. That’s because its army of lobbyists are already hard at work, trying to hijack the appropriations process as a vehicle to enact its deregulatory wish list. Wall Street is essentially holding national priorities like health care, the environment and education hostage until members of Congress agree to put the industry’s narrow special interests before the interests of the American people.
A key priority for Wall Street this time around is eviscerating one of the most important institutions established under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Financial Stability Oversight Council. This Council is our nation’s only early warning system for the threats posted by systemically significant nonbank financial firms like insurance giant AIG, which the government and taxpayers were forced to rescue during the 2008 financial crash.
There was broad-based, bipartisan and industry support for an entity like this in the wake of the financial crisis, including from the Financial Services Forum, the American Bankers Association, the Securities Industry and Financial Markets Association, and the Investment Company Institute. But as the crash recedes in memory, many in the industry are turning on the Council and trying to get their allies in Congress to attach provisions to the appropriations bill that would gut its authority and allow systematically significant nonbanks to go back to being unregulated despite the threat to taxpayers.
The risks to the Dodd-Frank Wall Street reform law don’t end there. The too-big-to-fail banks and their allies are also trying to undermine the work of the Consumer Financial Protection Bureau, an agency created under this law to protect consumers from unscrupulous business practices.
One banker who has contributed to Bernie Sanders is Paul Ryan, a partner atHayfield Financial, a firm that advises private equity and hedge funds. He’s been on Wall Street for 30 years and says the financial system has become so complex, so manipulated, and corrupt that only Bernie Sanders can save it.
“The whole understanding of Wall Street that I have comes from Judge Brandeis[who said], ‘Sunlight is the greatest of disinfectants,’ something that we seem to have forgotten,” Ryan says. “Wall Street has gotten dark and complex in the last 50 years. There’s disintermediation of the banks, and everything that was clear and understood we’ve now murked up.”
The financial industry is consciously growing darker and darker, Ryan argues, adding that the banking sector is growing even more complicated.
“More than size, complexity is the problem,” he says. “Glass-Steagall separates things and makes things less complex. When you mix the investment bank and the shadow economy with the commercial bank, that’s a real complicated thing. I dare say—and I’m reasonably educated; went to law school, majored in economics, and worked in a bank—I’m hard pressed to know what Goldman Sachs or CitiBank actually does. And I didn’t fall off a turnip truck. I just can’t figure out what they’re doing right now.”
Unlike his peers in New York’s financial district, Ryan welcomes Sanders’ plan to get aggressive with with large banks.
Aggressive sales tactics at Wells Fargo Bank, already the subject of a lawsuit filed by L.A.’s city attorney, appear to have drawn the attention of federal regulators.
The Office of the Comptroller of the Currency and the San Francisco Federal Reserve areprobing the bank’s practices, the Wall Street Journal reported Monday, citing unnamed sources. An attorney representing Wells Fargo customers and former employees who have sued the bank told The Times that representatives from the OCC, a federal bank watchdog, have contacted his office about those cases.
The inquiries, like a lawsuit filed this year by the Los Angeles city attorney’s office, appear related to allegations that the San Francisco banking giant has employed a high-pressure sales system that encourages illegal behavior by employees.
The bank’s practices came to light in a 2013 Times investigation that found Wells Fargo employees, facing strict sales quotas and fearing retribution from their superiors, created accounts without customers’ knowledge and even forged customers’ signatures.