On January 11, the OCC reported that it has ordered a large London-based bank to pay $32.5 million to settle claims that the bank failed to properly follow the regulator’s orders to improve mortgage foreclosure practices that led to borrowers being harmed after the 2008 credit crisis. Specifically, the OCC had accused the bank in 2015 of failing to meet the demands it had agreed to, and the agency imposed certain additional restrictions on the company’s mortgage-servicing abilities until it fixed the alleged shortcomings. The regulator also noted that the bank had failed to properly file documents in certain bankruptcy cases after the orders (for which it was ordered to pay $3.5 million in remediation to borrowers). The OCC confirmed, however, that the bank is now in compliance with all OCC orders related to the alleged foreclosure practices.
On January 9, the CFPB entered into a Consent Order and Stipulation against two medical debt-collection law firms and their president for alleged violations of the FDCPA and FCRA. Based on these allegations, the CFPB ordered the Respondents to provide $577,135 in relief to affected consumers, correct their business practices, and pay a $78,800 civil money penalty. According to the allegations set forth in the consent order, between January 2012 and August 2016, debt collectors working for the firms violated the FDCPA by giving the false impression that the firm’s “Demand Letters were from an attorney or that the firm’s attorneys were meaningfully involved in reviewing the consumer’s case or had reached a professional judgment that sending a Demand Letter or making a collection call was warranted.” The Bureau also found that the firms notarized consumer affidavits for use in debt-collection lawsuits without properly verifying the truth of the signature. The CFPB also alleged that the firms violated FCRA’s Regulation V by failing to establish, implement, and periodically review and update reasonable written policies and procedures regarding the accuracy and integrity of consumer information furnished to consumer reporting agencies.
On January 12, Treasury’s Office of Foreign Asset Control (OFAC) announced a $17,500 settlement agreement with Aban Offshoe Limited (“Aban”) of Chennai, India, in connection with an alleged violation of Iranian Transactions and Sanctions Regulations. The alleged violation arises out of events that occurred in June 2008, when Aban’s Singapore subsidiary allegedly placed an order for oil rig supplies from a vendor in the United States with the intended purpose of re-exporting these supplies from the United Arab Emirates to a jack-up oil drilling rig located in the South Pars Gas Fields in Iranian territorial waters. OFAC noted, among other things, that the alleged violation constitutes a non-egregious case, but that Aban did not voluntarily self-disclose the apparent violation.
On December 30, the FDIC announced new regulatory actions against a Florida-based bank. Along with the Florida Office of Financial Regulation, the FDIC issued a new Consent Order against the $121.5 million-asset bank, based on allegations that the bank had engaged in “unsafe or unsound” banking practices, or practices which constituted a violation of law or regulation in the following areas: (i) weakness in asset quality, (ii) capital adequacy, earnings, (iii) management effectiveness, (iv) liquidity, (v) sensitivity to market risk, and (vi) compliance with the Bank Secrecy Act (BSA).
Among other things, the Order notes that the bank currently falls short of FDIC requirements for qualifying as “well capitalized,” qualifying merely as “adequately capitalized,” and therefore must boost its capital levels or face continued restrictions on its operations. The Order also states that the bank—which consented to the Order without admitting or denying the charges—now has 120 days to meet its capital requirements and 60 days to submit a capital plan to both: (i) achieve and maintain the capital requirements; and (ii) provide for a contingency plan to sell or merge the bank.
On December 28, FINRA entered into an acceptance, waiver, and consent (AWC) agreement with a Puerto-Rican-based brokerage firm based upon allegations that the firm’s anti-money laundering (AML) program “was not reasonably designed to achieve and monitor compliance with the requirements of the Bank Secrecy Act.” In deciding to levy a $5.75 million fine, FINRA noted, among other things, that the firm improperly “relied on manual supervisory review of securities transactions” that was “not sufficiently focused on AML risks.” The firm neither admitted nor denied the findings set forth in the AWC agreement, but agreed to address deficiencies in their AML program within 180 days. According to a firm spokeswoman, the firm is “pleased to have this matter from 2013 resolved and we continue to improve, manage and monitor our AML efforts.”