10 Big Things in Banking This Week (Guess which Senator called Dodd-Frank a 'Dumpster Fire'.)
1. Hatch shares gif of dumpster fire: ‘Checking in on Dodd Frank’, The Hill
Sen. Orrin Hatch (R-Utah) doesn't think highly of the Dodd-Frank Act, and his office took to Twitter on Saturday to illustrate that sentiment.
"Checking in to see how Dodd-Frank is doing after 7 years," Hatch's staffers posted on the Utah Republicans' Twitter account, along with a gif of a dumpster fire:
See the tweet here.
Hatch, the chairman of the powerful Senate Finance Committee, has long been an opponent of the 2010 banking law. In February, he said the measure was "worse than ObamaCare,"
"I think it's one of the worst bills that's ever been passed through Congress and I think it's part of the reason why so many people are having financial difficulty today in this country," Hatch told Bloomberg at the time. "It was an overreach in every way; more and more requirements, more and more paperwork — it's just incredible." Read More.
2. Consumers Notched a Big Win Against Fine Print 2 Weeks Ago. The House Just Voted to Roll It Back, Time Money
Just when it seemed consumers had scored a win against predatory fine print, Republicans are moving swiftly to kill that victory. At stake is the Consumer Financial Protection Bureau’s newly established rule that would allow people to sue their banks and credit cards in class action suits.
Announced in early July and slated to apply to contracts signed after March 2018, the arbitration rule prohibits major financial institutions—a group that includes banks, credit card companies, student lenders, payday lenders, debt collectors, and credit reporting companies—from imposing any contractual fine print that would stop consumers from banning together to bring a class action lawsuit.
But just two weeks after being finalized, the rule is now fighting for survival. Under the existing Congressional Rule Act, Congress can block new regulatory measures—and so in a floor vote on Tuesday, the House of Representatives passed legislation blocking the rule.
“Eliminating this overbearing rule is a big win for consumers,” Rep. Ken Buck (R-Colo.) said during Tuesday's House debate. “Arbitration is alternative to the judicial system and it often results in a better result for consumers.”
A parallel Senate version of the measure has not advanced, despite earlier statements from Senate Republicans indicating they would take up overturning the rule in the next few weeks.
It’s “more controversial than previously thought,” Lauren Saunders, associate director at the National Consumer Law Center, said Monday.
The White House has also voiced its opposition to the arbitration rule, saying in a statement supporting the Republican-led bills that it was a “harmful rule [that] would benefit trial lawyers by increasing frivolous class action lawsuits.”
Arbitration clauses are commonplace in the financial industry: About three-fourths of banks analyzed by Pew Charitable Trusts, for instance, had mandatory arbitration agreements in place. These mean customers have no recourse but to bring any disputes to private, arbitration panels. In general, that keeps many of the details shrouded in secrecy, as in the case of the Wells Fargo account fraud scandal, according to consumer advocates.
Therefore, the CFPB rule's greatest long-term impact may be to place a brighter spotlight on the industry's bad actors, by establishing a plan for a new, CFPB-controlled database of public information on arbitration cases. Read More.
3. Wall Street regulatory panel soon will have only 1 member (and 4 empty seats), LA Times
After more than three years helping lead one of the country’s most powerful Wall Street regulators, Sharon Bowen is ready to step down.
Her pending departure from the Commodity Futures Trading Commission will leave the five-member board with just one member. And that’s a problem for a panel responsible for regulating some of the country’s most complex financial markets.
It’s also a problem for President Trump. Last week, his administration once again reiterated its pledge to rid the government of cumbersome regulations it contends are strangling business. But the task is proving difficult to achieve because many regulations are written to enforce congressionally authorized laws, and the White House can’t unilaterally remove them. And even in the areas where the administration has the power, it needs to write new rules to replace old ones.
Although there may be plenty of career bureaucrats to craft the new language, there is a decided lack of deciders at the helm of many agencies to approve them, particularly in the financial regulatory sphere.
In addition to openings at the commodity commission, the Securities and Exchange Commission needs two more commissioners, and three positions remain open on the Federal Reserve’s Board of Governors. Trump’s pick to lead the Federal Deposit Insurance Corp., Jim Clinger, recently withdrew his nomination citing family issues.
Many presidents struggle to quickly fill vacant seats, but “the Trump administration has just done it much worse,” said Max Stier, president of the Partnership for Public Service, a nonpartisan group that studies government management. At this point in the Obama administration, 203 positions that require Senate confirmation were filled, while Trump has been able to fill only 50 of those positions, according to data tracked by the group. Read More.
4. CFPB Publishes Update to Debt Collection Rulemaking Timeline, ConsumerFinance.Gov
We are also engaged in rulemaking activities regarding the debt collection market, which continues to be the single largest source of complaints to the federal government of any industry. We are concerned that because consumers cannot choose their debt collectors or “vote with their feet,” they have less ability to protect themselves from harmful practices. In January 2017, we published the results of a survey of consumers about their experiences with debt collection. We have also received encouragement from industry to engage in rulemaking to make the standards clear and address issues of concern under the Fair Debt Collection Practices Act (FDCPA), such as the application of the FDCPA to modern communication technologies under the 40-year-old statute. We released an under consideration in July 2016 concerning practices by companies that are “debt collectors” under the FDCPA, in advance of convening a panel under the Small Business Regulatory Enforcement Fairness Act (SBREFA) in conjunction with the Office of Management and Budget and the Small Business Administration’s Chief Counsel for Advocacy to consult with representatives of small businesses that might be affected by the rulemaking. Building on feedback received through the SBREFA panel, we have decided to issue a proposed rule later in 2017 concerning debt collectors’ communications practices and consumer disclosures. We intend to follow up separately at a later time about concerns regarding information flows between creditors and FDCPA collectors and about potential rules to govern creditors that collect their own debts. Read More.
5. Police arrest suspect in three bank robberies in downtown D.C. in 30 minutes, The Washington Post
A man who served more than a decade in prison for robbing banks and was freed in March was arrested Friday after D.C. police said he robbed or tried to rob several banks in Washington, three of them in a half-hour on Friday.
Timothy Louria Jennings Sr., 60, who lives in the District, was charged with two counts of attempted bank robbery and two counts of bank robbery, and was awaiting his initial appearance in court. Police said that in the all of the recent cases, he used a demand note and escaped in a 2003 champagne-colored Cadillac.
Police allege the suspect robbed a SunTrust on Monday in the 900 block of 17th Street NW at Farragut Square, and obtained an undetermined amount of money.
On Friday, police said the suspect at 9:15 a.m. robbed an M&T Bank in the 500 block of 12th Street NW, obtaining money, and then 15 minutes later attempted to rob a BB&T Bank in the 800 block of Connecticut Avenue NW. Police said no money was taken.
At 9:45 a.m., police said the suspect went to a Bank of America across the street in the 800 block of 17th Street NW, which they said he also tried to rob. Police said that he handed a teller a note but that the teller became confused and backed away from the counter.
A police report says that the man left without money and that a bystander copied down the license plate of the Cadillac seen being driven away. Hours later, police said they found the vehicle in the Michigan Park neighborhood of Northeast Washington and arrested Jennings. Read More.
6. FTC enforcement under new leadership to focus on consumer harm, fraud, Consumer Finance Monitor
Based on a Law360 article reporting on an interview with Thomas Pahl, the Acting Director of the FTC Bureau of Consumer Protection, it appears that under its new leadership, the FTC will take a less aggressive approach to enforcement than the agency had taken under the Obama Administration. Mr. Pahl was appointed Acting Director by Maureen Ohlhausen, who President Trump named Acting Chairman of the FTC.
While Mr. Pahl stated that privacy enforcement will continue to be an FTC priority, he indicated that the FTC will not follow the Obama Administration’s approach of labeling certain privacy and data security practices unfair or deceptive in the absence of clear consumer harm. According to Mr. Pahl, the FTC’s enforcement activity will target practices where there is concrete, tangible evidence of consumer injury.
With regard to national advertising, Mr. Pahl indicated that the FTC’s enforcement activity will focus on fraud and quasi-fraud and will prioritize matters involving advertising and marketing directed at certain populations such as the military, the elderly, and consumers living in rural areas. He also indicated that in deciding whether to recommend an enforcement action, FTC staff will look at consumer injury and the costs and benefits of a practice.
With regard to financial practices, Mr. Pahl indicated that the FTC’s enforcement activity will target matters involving fraud or quasi-fraud in areas such as debt collection and payday lending, with priority given to matters that are outside of the CFPB’s jurisdiction. Read More.
7. Bank workers jailed for part in huge fraud that netted millions from rich Lloyds TSB customers, Mirror
Lloyds bank workers who helped a gang of fraudsters to steal millions of pounds from rich customers using a string of impersonators have been jailed
Bank workers Courtney Ayinbode, 29, Tajinder Galsinh, 35, Molly Jones, 24, and Benjamin Omoregie, 26, were all involved in the “high-level and sophisticated” scam .
The insiders scoured the computer system for dormant accounts holding large sums of money and passed on the details.
They also ordered new bank cards and altered phone numbers and addresses so that imposters could pose as the customers and set up transfers of hundreds of thousands of pounds at a time.
The money was then laundered through a series of bogus companies before being moved offshore to prevent it being recovered.
One victim lost more than £750,000 after a unknown man used a fake driving licence in his name to set up two transfers over three days.
Another customer with £3million in the bank only escaped becoming a victim when another member of staff became suspicious and rang him up to check.
The money was washed by “bespoke money launderer” Eddie Lakes, 41, and his henchman Kushveer Raulia, 25, through a complicated network of fake companies and accounts with the help of Parvez Hussain, 50. Read More.
8. Nominee for banking post meets resistance due to fraud settlement, Reveal News
“Cold and calculating and not willing to take the tiniest bit of responsibility” is how federal whistleblower Sandra Jolley describes Joseph Otting, President Donald Trump’s pick for comptroller of the currency, the nation’s chief bank regulator.
Otting’s confirmation hearing is scheduled for Thursday before the Senate Committee on Banking, Housing and Urban Affairs.
“There shouldn’t even be a hearing,” said Jolley, whose disclosures resulted in an $89 million fraud settlement between the Department of Justice and Otting’s old bank.
The government had alleged Financial Freedom Senior Funding, a division of OneWest, where Otting was CEO, bilked taxpayers by wrongfully foreclosing on borrowers and then sticking the government with excess insurance payments on federally insured reverse mortgages.
Otting could not be reached for comment. In an email, Gina Prioria, a spokeswoman for CIT – a New York-based holding company thatpurchased OneWest in 2015 – said her firm was “pleased to have resolved” the claims that stemmed from Jolley’s allegation, adding that “the settlement is within the company’s reserve.”
CIT fired Otting shortly after purchasing the company from a private equity fund run by Steve Mnuchin, now Trump’s treasury secretary. It paid Otting a reported $12 million in severance.
Jolley said she learned of the fraud fighting what she said was a wrongful foreclosure on her parents’ Southern California home. She said the company’s improper activities started with its sales tactics. Read More.
9. When student debt payoff becomes complicated by identity theft, LA Times
Dear Liz: I went back to school in 2002 to get my teaching credential. I took out several student loans and set up a repayment plan upon graduating with automatic deduction out of my checking account. Several years ago, the IRSstarted garnishing my bank account stating that there was a lien but I never received any other type of indication what was going on.
After contacting the IRS, we found that someone took out a fraudulent student loan using my former married name. I also got my credit reports, which showed the loan. I was able to get the signed loan documents from the U.S. Department of Education but now the department does not respond to my certified letters or phone calls.
I'm at a loss at what to do at this point. I filed a police report and notified the credit reporting agencies. I’m out almost $10,000. Is there any other advice you could give me?
Answer: First, follow up with the credit bureaus to make sure the fraudulent loan has been removed from your credit reports. Consider setting up credit freezes at all three bureaus to reduce the chances of being victimized again. The Identity Theft Resource Center at www.idtheftcenter.org has more information to help you protect yourself.
Getting the actual loan dismissed and your money back is a more difficult task. You may be able to have the loan erased under what’s known as a false certification discharge, but qualifying for that isn’t easy, said Jay Fleischman, a Los Angeles attorney who specializes in student loan problems.
It’s not enough to have a police report. You’d need to identify and file a lawsuit against the thief. If you can get a court judgment against that person, you would provide the Education Department with that as well as proof of your identity and possibly signature samples from the approximate date of the loan. Read More.
10. Bank robber believed to have hit four banks in 8 months: FBI, Chicago Tribune
Federal officials on Sunday said the latest string of bank robberies in the Chicagoland area are all tied to one man, who they need help in catching.
On Saturday, the robber went into a Fifth Third Bank branch at 7150 Mannheim Road in Rosemont just before 2 p.m., said Garrett Coon, a spokesman for the FBI.
The previous robberies were in January and February, in Woodridge and Elgin, respectively. All of the robbery times were in the afternoon; the first two happened about 4:10 p.m. and 5:15 p.m., Croon said.
On June 30, a Chase Bank branch was robbed at 4:47 p.m. in Buffalo Grove, and that robbery is linked to the same man, based on the evidence, Croon said, but he couldn’t elaborate on why.
Croon didn’t say whether it was typical to target different branches of the same bank, such as three Fifth Third locations. Authorities didn’t provide information about the dormant period between the robberies, from Feb. 3 to June 30.
Croon said that at least in the most recent robbery, no weapon was displayed or implied. Croon didn’t want to say whether the bank robber is passing a note or asking the teller for money.
“I’m not going to say demand note or verbal demand, we classify as a non-takeover,” Croon said, meaning the other customers and staff inside the bank were not ordered to do anything in particular.
Witnesses told investigators they believe the man had foundation on his face.
“I don’t know why he’s wearing makeup,” Croon said when asked whether the robber could be trying to cover up noticeable markings on his face.
Authorities describe the robber as a white man with brown hair and unknown eye color, who stands somewhere between 5 feet 8 inches tall and 6 feet 1 inch tall, with a thin to medium build. He’s been described as appearing to be between 25 and about 35, and he was last seen wearing black sunglasses, a black coat, blue jeans, a black shirt and brown shoes with white soles, officials said. Read More.