Links in “Fines, Penalties, Suits, and Settlements”

CFPB and DoJ action against Ally Bank comes on the heels of the CFPB bulletin informing indirect auto lenders they would be on the hook for any intentional or disparate impact on minorities. [12/23]

Ocwen Loan Servicing required to make $2 billion principal reduction to current underwater borrowers and refund $125 million to 185,000 foreclosed borrowers (average $675). Ocwen cites failure at many stages of servicing including improper short-cuts, unauthorized fees, deception, improper consideration of modifications, misleading information, etc. [12/20]

CFPB complaint filed against CashCall seeks to curb online lender's practices and seek penalties. [12/17]

New Jersey settles with PHH Mortgage for inaccurate statements about the time it would take to process loan modification requests and inaccurate statements to consumers about foreclosure proceedings and assessments of improper late fees and other fees. [12/16]

United Recovery (UCR), a Florida-based collection firm used by a number of credit unions, is being sued by the Colorado Attorney General for allegedly faking collection documents. The AG claims that UCR used actual borrower data to falsify affidavits used to verify additional debt that were then sold to third party collectors. [12/12]

CFPB fines GE CareCredit $34.1 million on product offering that facilitate payments for medical and dental costs, but was insufficiently transparent in the heavy interest costs if not paid in full. Requires improved enrollment processes, enhanced disclosures, and greater training. [12/11]

It's not just regulators or activist groups looking at fair lending data. The city of Los Angeles filed suit against Bank of America alleging discriminatory lending, practices that contributed to a higher number of foreclosures in minority neighborhoods, declining property values and lost tax revenue, and an estimated $1.2 billion in safety inspections, property maintenance and other expenses related to foreclosures. [12/10]

Banesco USA told to fix its anti-money laundering issues, including creating a BSA committee on its board, adding compliance staff, increasing training, hiring consultants to review controls, improving its AML risk-rating method, and reviewing procedures for wire transfers and new accounts. [12/9]

Former CEO Kenneth Williams of $268 million Infinity FCU was fired after 30 years when an audit found substantial evidence of his use of corporate funds for personal use. The credit union is now suing him stating that his $66,000 in charges in the past two years on his corporate credit card among other expenses constitutes conversion, unjust enrichment, breach of fiduciary duty and fraud. Williams claims that the action is in retaliation for an age discrimination claim he filed prior to his dismissal. [12/6]

Here’s why it is so important to perform thorough due diligence before purchasing loan participation interests. $20 million Northern Piedmont FCU in Culpeper, VA, has filed a $1.7 million civil lawsuit against three former employees of the now-liquidated Lynrockten FCU. Northern Piedmont purchased loan participations from Lynrcten FCU in loans that were later determined to be fraudulent. The majority of the funds from the loan participation purchases allegedly ended up in the personal accounts of the former employees. [12/5]