The Consumer Financial Protection Bureau has accused TCF National Bank (TCB), a Minnesota-based bank with 360 branches in seven states, of tricking hundreds of thousands of customers into accepting costly overdraft services.
Back in 2007, the Federal Reserve gave consumers overdraft protections, requiring banks to ask customers to opt-in to overdraft services that came with expensive charges.
“The Opt-In Rule posed a serious threat to TCF, which depends on overdraft revenue to a greater degree than its competitors,” the CFPB wrote in its complaint suing the bank. According to CFPB Director Richard Cordray, this is because the bank doesn’t rake in substantial revenue from other common consumer banking products like credit cards and mortgages.
“A substantial part of [TCF’s] revenue comes from fees,” Cordray said on a conference call Thursday. The opt-in rule would be a problem. “In 2009, TCF estimated that $182 million in annual revenues was at risk.”
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The U.S. Department of Labor on Wednesday filed a lawsuit againstJPMorgan claiming the bank engaged in pay discrimination against women.
The department in a complaint filed with an administrative judge said New York-based JPMorgan has paid at least 93 women in four different job categories less than comparable male coworkers over the last five years.
The complaint is available at http://src.bna.com/lvt .
A top Senate Democrat is pressing the FBI for any information it may have about a possible probe into a film production company with deep ties to President-elect Donald Trump’s pick to head the Treasury Department.
After a public records request indicated that there could be “enforcement proceedings” involving the company Relativity Media, Sen. Sherrod Brown (D-Ohio) wants to know more. That company, which declared bankruptcy in 2015, once counted among its top investors Steven Mnuchin, Trump’s nominee for Treasury Secretary.
Banks that settle government investigations often receive an outside monitor to ensure that they make good on their promises to reform.
Deutsche Bank AG now has five.
To resolve the Justice Department’s investigation over its mortgage-backed securities business, the bank agreed Tuesday to a $7.2 billion penalty, more than half of which will provide relief to consumers hurt by its conduct. To check its remediation work, the bank agreed to hire an independent monitor, Michael Bresnick, a former prosecutor.
The monitoring job brings Bresnick full circle. He was a Justice Department lawyer who helped start the task force that investigated Deutsche Bank and many other U.S. and European banks. The probes led to multibillion-dollar settlements with the banks — which created work for monitors like Bresnick, who’s now with the law firm Venable LLP.
Bresnick and a Deutsche Bank representative declined to comment on his appointment. Chief Executive Officer John Cryan apologized for the conduct when the settlement was announced earlier Friday, saying the bank had exited many of the underlying activities and has improved its standards.
In a unanimous opinion handed down Wednesday, the Supreme Court limitedFannie Mae’s ability to transfer cases to federal court, ruling that the government-sponsored enterprise’s charter does not grant it the right to move all state cases to the federal level.
The decision, written by Justice Sonia Sotomayor, overturns a lower court’s ruling, which held that the “sue-and-be-sued” clause in Fannie Mae’s charter allowed for the GSE to transfer any lawsuits against it filed at the state level to federal court.
In the opinion, Sotomayor writes that none of Fannie Mae’s arguments about the interpretation of the “sue-and-be-sued” clause are “persuasive.”
Sotomayor writes that the Court previously ruled on several other arguments from other federally chartered organizations, but notes that Fannie Mae’s charter differs in that “sue-and-be-sued” clause states that cases can be transferred to “any court of competent jurisdiction.”
The clause in question authorizes Fannie Mae “to sue and to be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal.”
That distinction places Fannie Mae on the losing end of this argument, according to the court’s ruling.
Morgan Stanley CEO James Gorman defended Dodd-Frank in an interview with CNBC on Thursday, weighing in on the uncertain future of the act under the incoming Trump administration.
“Let me be very clear about this, I am not a fan of getting rid of Dodd-Frank,” Stanley told CNBC.
However, he continued, “There are elements of Dodd-Frank that clearly need to be curtailed.”
Shortly after winning the election, President-elect Donald Trump’s transition teamposted his plans for the first days in office, which included his plan to “dismantle” the Dodd-Frank Wall Street Reform Act.
The website calls Dodd-Frank a “sprawling and complex piece of legislation that has unleashed hundreds of new rules and several new bureaucratic agencies,” including theConsumer Financial Protection Bureau.
Not too long after Trump’s team announced their plans, Trump’s U.S. Treasury Secretary nominee Steve Mnuchin also gave his thoughts on the Dodd-Frank Wall Street Reform Act in an interview with CNBC.
During the interview, Mnuchin said, “The No. 1 problem with Dodd-Frank is it is way too complicated and it cuts back lending.”
“We want to strip back parts of Dodd-Frank that prevent banks from lending and that will be the No. 1 priority on the regulatory side,” he told CNBC.
For the second time in as many days, the Department of Justice announced that it reached a multi-billion dollar settlement with a foreign-based bank over its mortgage securitization practices leading up to the housing crisis.
On Tuesday, the DOJ announced that it reached a $7.2 billion settlement withDeutsche Bank in connection with the bank’s issuance and underwriting of residential mortgage-backed securities between 2005 and 2007.
Now, it’s Credit Suisse’s turn.
As with Deutsche Bank, Credit Suisse announced in late December that it reached a settlement in principle with the DOJ, but Wednesday, the DOJ made it official.
According to the DOJ, Credit Suisse will pay $5.28 billion in the settlement, which relates to the packaging, securitization, issuance, marketing and sale of residential mortgage-backed securities between 2005 and 2007.
Under the terms of the settlement, Credit Suisse will pay $2.48 billion as a civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act.