Wells Fargo must reform its practices and pay a $3.6 million fine for actions that federal consumer protection officials say misled student loan borrowers and resulted in some paying unnecessary fees.
In the order filed Monday leveling the penalty, theConsumer Financial Protection Bureau said the bank acted illegally, charging on-time payers with late fees, failed to inform borrowers of steps they could take to minimize fees and left credit report errors uncorrected.
“Wells Fargo hit borrowers with illegal fees and deprived others of critical information needed to effectively manage their student loan accounts,” bureau Director Richard Cordray said in a statement. “Consumers should be able to rely on their servicer to process and credit payments correctly and to provide accurate and timely information.’’
(CN) — Homeowners can sue Bank of America for claims it feigned compliance with a mortgage assistance plan that was a condition of the bank’s $45 billion bailout in 2008, the 10th Circuit ruled Monday.
Bank of America hired Urban Settlement Services dba Urban Lending Solutions to administer its Home Affordable Modification Program, or HAMP.
The bank was required to participate in HAMP as a condition of receiving a $45 billion bailout from the federal government to shore up the bank’s bad loans during the 2008 financial crisis. The government also guaranteed $118 billion in potential losses at the bank.
HAMP required Bank of America to collect financial information from at-risk borrowers, and evaluate their eligibility for a loan modification that would allow them to pay a lower interest on their mortgage.
The program allowed eligible borrowers to enter…
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April 18, 2016
After 2008, everyone hated Fannie and Freddie, and for good reason. These quasi-private companies are essentially giant piles of money that were intended to advance a simple, utility-like mandate to keep credit flowing in the housing markets.
In the pre-crash years, however, the firms’ leaders acted less like the stewards of utilities and more like sleazy Wall Street hotshots. They made hyper-aggressive business decisions because their bonuses were tied to earnings growth. Some executives even engaged in Enronesque accounting manipulations in an effort to jack up their bonuses even further. These efforts led to record civil fines.
Contrary to popular belief, the one thing they weren’t guilty of was causing the 2008 crash. As the Financial Crisis Inquiry Commission later concluded, the GSEs were followers rather than leaders of the subprime craze. They invested far less recklessly than did the giant Wall…
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The payday lending industry is evolving, but its newest products may simply provide consumers with a different route into a money hole.
Payday lenders are increasingly turning to installment loans, with all of America’s biggest payday lending companies now selling the products, according to new research from Pew Charitable Trusts. Instead of requiring repayment of a loan within days or weeks, these products are repayable over several months.
On the face of it, these loans may seem like a better deal for borrowers because they provide more time to repay the lender, and consumers tend to prefer an installment payment structure, Pew found. Yet the foundation is warning that the installment loans carry many of the same hallmarks of the traditional payday loans, such as sky-high interest rates. And lenders are shifting to installment loans partly because the products sidestep some state regulations and the Consumer Financial Protection Bureau’s…
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Bank of America and a Colorado outsourcing firm will have to face a lawsuit accusing them of sabotaging homeowners’ efforts to modify their mortgages, a federal appeals court has ruled.
The decision on Monday by the 10th U.S. Circuit Court of Appeals revives a 2013 proposed class action accusing Bank of America and Urban Settlement Solutions of violating the U.S. Racketeer Influenced and Corrupt Organizations (RICO) Act by conspiring to deny government-sponsored mortgage assistance to thousands of qualified homeowners.