Monthly Archives: November 2017

Wells Fargo overcharged hundreds of business clients: report

Wells Fargo & Co. WFC, -0.26% cheated a number of their foreign-currency exchange business customers by overcharging them, according to a Wall Street Journal report late Monday. According to the Journal, an internal review found that out of about 300 fee agreements, only 35 companies ended up paying what they were originally told the price was. Foreign-exchange employees received bonuses based on how much revenue they generated, sources told the Journal, and the bank charged unusually high fees. According to the report, the overcharging scheme relied on customers not double-checking how much they were charged, confusing fees and Wells Fargo brushing off complaints.

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THE LAWYER WHO wrote the Office of Legal Counsel memo supporting the Trump administration’s viewpoint that the president can appoint Mick Mulvaney as acting director of the Consumer Financial Protection Bureau represented a payday lender in front of the CFPB last year.

Steven A. Engel wrote the memo for OLC, which has been criticized by academics for seeking a conclusion and working backward to justify it. “Let’s be honest, this is an argument where you get the answer, and then you go to the other side of the equation,” said former Rep. Barney Frank, D-Mass., a lead author of the Dodd-Frank Act, which created the CFPB. Engel was confirmed as an assistant attorney general earlier this month by a voice vote in the Senate.

But in July 2015, Engel was one of two lead counsels for NDG Financial Corp., a Canadian payday lender that CFPB cited for running a nine-year scheme to use its foreign status to offer U.S. customers high-cost loans that were at odds with state and federal law. “We are taking action against the NDG Enterprise for collecting money it had no right to take from consumers,” said CFPB Director Richard Cordray at the time. Engel was active in the case up until August of this year.

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Trump Conflict Of Interest: CFPB Pick Mulvaney Linked To Lobbyist For Bank Facing Possible CFPB Sanctions

Trump is trying to install former lawmaker and White House budget director Mick Mulvaney to head the CFPB, after the resignation of its former chief, Obama appointee Richard Cordray. Federal recordsshow Mulvaney’s longtime staffer is Natalee Binkholder, who left Mulvaney’s office to work as a top lobbyist for Santander – a major bank.

The records show Binkholder worked for Mulvaney from 2011 to 2017, ultimately serving as his chief of staff in the U.S. House.Federal records show that in representing Santander in 2017, Binkholder has lobbied on a congressional bill to kill a CFPB rule designed to prevent financial firms from forcing customers to waive their rights to join class action lawsuits.

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Former CFPB enforcement chief resigned from the bureau, will lead Consumer Financial Services Enforcement Practice at Goodwin

Anthony Alexis, who served as the CFPB’s head of enforcement and recently announced his resignation from the bureau, is joining Goodwin, a law firm.

Alexis announced his resignation last month, stepping down from a role that placed him at the forefront of how the CFPB enforced financial regulations. At the CFPB, Alexis developed and managed the CFPB’s enforcement strategy, coordinated investigations and the prosecution of litigation, along with leading the resolution of major regulatory matters within the CFPB’s purview.

Earlier this month, the bureau tapped long-time CFPB employee Kristen Donoghue to replace Alexis.

While at the CFPB, Donoghue rose from enforcement attorney, to assistant litigation deputy in the office of enforcement, to assistant deputy director for policy and strategy in the office of enforcement, to deputy enforcement director, and finally to principal deputy enforcement director – serving as Alexis’ top deputy.

Now, Alexis is moving to Goodwin, where he will serve as a partner in the firm’s Financial Industry Practice and as the head of the firm’s Consumer Financial Services Enforcement Practice.

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November 26, 2017

Washington, DC – The Acting Director of the Consumer Financial Protection Bureau, Leandra English, filed a legal action tonight seeking legal clarity concerning the Bureau’s leadership succession.

“The talented and hard-working CFPB staff stand up for consumers every day. As Acting Director, I am filing this lawsuit to stand up for the CFPB,” said Acting Director English.

Effective at midnight on November 24, 2017, Richard Cordray resigned his post as the first Director of the Bureau. At that point, Leandra English, the Bureau’s Deputy Director, became the agency’s Acting Director, the suit claims. The Dodd-Frank Act—the law that created the Bureau—mandates that the Deputy Director “shall” serve as the acting Director until the Senate confirms a new Director.

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Here is the lawsuit. Click here.

Who is Deepak Gupta? He is Ms. English attorney and was the former CFPB attorney.

Reverse mortgages: Evict woman, 92, over 27¢?

Actor and pitchman Tom Selleck, among others, has helped persuade more than 1 million seniors in markets like Palm Beach County that reverse mortgages are not “too good to be true.”

But a federal agency overseen by Housing Secretary Ben Carson of Palm Beach Gardens says an insurance program backing reverse mortgages is “losing money and can no longer remain viable in its present form.”

Foreclosures in reverse mortgages climbed to more than 3,600 a month last year, up from less than 500 a month in prior years, according to government data analyzed by nonprofit groups.

A 92-year-old Florida woman with a reverse mortgage faced a foreclosure filing because she owed 27 cents, a legal aid group said.

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FINRA fines JPMorgan $1.25 million for failures in employee background checks

NEW YORK (Reuters) – The Financial Industry Regulatory Authority said on Tuesday it fined JPMorgan Chase & Co’s (JPM.N) securities division $1.25 million for failing to conduct adequate background checks on 8,600 employees, including four people whose criminal convictions automatically disqualified them from working there.

Of the four individuals that FINRA found who were subject to “statutory disqualification” because of some criminal history, it said that one worked at JPMorgan for 10 years and another for eight years. Securities rules require banks to seek regulatory approval to employ anyone convicted of certain criminal offenses.

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SIGNALING AN EPIC fight over control of the Consumer Financial Protection Bureau, the agency on Friday named Leandra English as Deputy Director. English had been serving as Richard Cordray’s chief of staff.

Hours later, Cordray officially resigned. Under the statutory line of succession spelled out in the law that created the agency, the deputy director automatically replaces him, with full powers of the office, until the Senate formally confirms a new director selected by the president.

President Trump had planned to name Mick Mulvaney, current director of the Office of Management and Budget, as interim director, wresting immediate control of CFPB without having to go through Congress. The administration would have relied on the Federal Vacancies Reform Act, which allows the president to make appointments to federal agencies in certain cases. But as The Intercept reported earlier this week, there was a hitch in that plan: The temporary pick is not legally Trump’s to make. (See the update below: Trump made the pick regardless late on Friday evening.)

The appointment of English, just moments before Cordray’s departure, suggests that CFPB will make the case that Trump can’t appoint anyoneon an interim basis, and that only the deputy director can replace an absent or unavailable director. The FVRA says specifically that it doesn’t apply to agencies where “a statutory provision … designates an officer or employee to perform the functions and duties of a specified office temporarily in an acting capacity.”

If Trump decides to appoint Mulvaney or another interim director anyway, it could set up a titanic battle, with effectively two different people claiming leadership of the agency — one who expressly opposes its mission, and one who supports it. The courts would have to sort out the aftermath, determining whether Trump’s appointee or Deputy Director English hold actual control.

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Wall St. traders secretly used chat rooms to rig Treasury bond prices: suit

Wall Street banks secretly shared client information in online chat rooms in order to rig auctions for the $14 trillion US Treasurys market, according to an explosive lawsuit filed in Manhattan federal court on Wednesday.

The move wrongly fattened the banks’ profits and picked profits from clients, the suit claims.

The new accusations, leveled by several pension funds and wealthy individual investors, are contained in an expanded class-action suit originally filed in July 2015 — and include an unusual twist: Some of the evidence came from confidential informants and one of the banks sued in the earlier action.

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More Questions Circle Wilbur Ross’ Ethics As Congress Ethics Watchdog, GAO, Investigation Requested

The U.S. Congress’ primary ethics watchdog, the Government Accountability Office (GAO), has been asked to investigate whether Commerce Secretary Wilbur Ross’ offshore investments could have created conflicts of interest, following revelations from the Paradise Papers.

Democratic Senators Cory Booker (D-NJ) and Richard Blumenthal (D-CT), who earlier joined four other senators in asking the Department of Commerce Inspector General to investigate possible conflicts of interest arising from Ross’ investments, requested the director of the independent congressional watchdog investigate the matter as well.

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