A federal judge granted the FDIC permission to revive lawsuits against Citigroup Inc (>> Citigroup), Bank of New York Mellon Corp (>> Bank of New York Mellon (The)) and U.S. Bancorp (>> US Bancorp) that he had dismissed last September, to recoup more than $695 million of losses on soured mortgage debt that a failed Texas bank once owned.
In a decision made public on Tuesday, U.S. District Judge Andrew Carter in Manhattan said the FDIC could try to show it still had legal standing to sue as the receiver for Austin-based Guaranty Bank, despite having transferred its claims to a “resecuritization trust” when it sold the debt in March 2010.
Law360, New York (June 27, 2017, 3:58 PM EDT) — Bank of America, Wells Fargo, JPMorgan Chase and Citigroup are accused of scamming U.S. agencies out of some $240 million in a False Claims Act suit unsealed Friday in Illinois federal court, which the government has said it will not join.
Relator Timothy Morgan’s March complaint was unsealed Friday after the U.S. declined to intervene. Morgan claims that the banks refused to pay vendors’ bills for foreclosure activity but still turned around and billed the U.S. for the supposed expenses.
The new acting chief of one of Washington’s major banking regulators has agreed to stay away from issues involving dozens of former legal clients, including 14 banks that the agency oversees, according to his ethics agreement.
Keith Noreika, who represented lenders as a private lawyer, plans to recuse himself from matters related to JPMorgan Chase & Co., Bank of America Corp., Goldman Sachs Group Inc. and Citigroup Inc., firms the Office of the Comptroller of the Currency regulates.
WASHINGTON — Some banks want to take on payday lenders.
Financial firms, spurred by the Trump administration’s promises to deregulate, hope to return to offering short-term, high-interest loans after being pushed out of the sector by Obama-era rules. Two leading trade groups, the American Bankers Association and Consumer Bankers Association, recently proposed to Treasury Secretary Steven Mnuchin several steps they say would encourage banks to offer such loans.
The groups call for scrapping 2013 guidelines that forced banks to virtually abandon the market. Also on their wish list: blocking the Consumer Financial Protection Bureau from rolling out the sweeping rules on payday lending proposed last year, which they say would hamper their return to the sector.
Letting banks and credit unions offer small loans, proponents say, would help the millions of U.S. households that pay billions of dollars in fees each year to payday and auto-title lenders that often charge annual interest rates exceeding 300%.
“We feel very strongly that we want to serve all our customer segments,” said Mark Erhardt, senior vice president of retail product management at Fifth Third Bancorp.
A pair of banks based in Ohio must begin increasing mortgage lending in minority neighborhoods in certain areas of Ohio and Indiana as part of a settlement with theDepartment of Justice, which accused the banks of “redlining.”
The DOJ defines redlining as a “discriminatory practice by banks or other financial institutions of denying or avoiding providing credit services to consumers because of the racial demographics of the neighborhood in which the consumer lives.”
In this case, the DOJ accused Union Savings Bank and Guardian Savings Bank, which are based in Cincinnati and share common ownership and management, of redlining “predominantly African-American” neighborhoods in Cincinnati; Columbus, Ohio; Dayton, Ohio; and Indianapolis.
The complaint alleged that from at least 2010 through 2014, the banks extended credit to the residents of predominantly white neighborhoods to a “significantly greater extent” than they extended credit to majority African-American neighborhoods in the same cities.
WASHINGTON—Bank stocks have surged since the election on hopes that President-elect Donald Trump will roll back financial rules. But deregulation, for the biggest institutions at least, might come with a catch: tougher limits on borrowing.
Some influential voices in Mr. Trump’s world insist banks should, as a quid pro quo for rolling back some regulations, maintain higher capital—shareholders’ funds that act as a cushion against losses but can also curb profits.
“Between Trump’s populist victory and the calls for greater capital by…Republicans, it is far from given that the largest Wall Street banks would benefit from their reform efforts,” said Mark Calabria, a former adviser to Senate Banking Committee Chairman Richard Shelby (R. Ala.), and now a fellow at the free-market Cato Institute.
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A full reimbursement for clients who had ‘mortgage floors’ could cost banks billions in back payments
Spanish lenders might have to pay billions of euros back to borrowers after the European Union’s top court Wednesday ruled against the banks in a disputeover variable-rate mortgages.
The European Court of Justice ruled that borrowers in Spain are entitled to be fully reimbursed for excess interest payments on variable-rate mortgages. The ruling follows a 2013 decision by Spain’s top court that outlawed so-called “mortgage floors,” deeming them unfair to clients because banks didn’t clearly explain to borrowers the economic and legal consequences of having a downward limit on how far interest payments could fall.
However, the Spanish court ruling said banks had to stop enforcing the mortgage floors but didn’t have to reimburse clients for any excess interest payments before the date of the 2013 ruling. A full reimbursement, the judges wrote at the time, would have meant “a risk of serious disruption” to Spain’s economy.
[WALL STREET JOURNAL]