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Wells Fargo Consumer Redress Review Program

the staff of the Ridgewood blog

Ridgewood NJ, Attorney General Gurbir S. Grewal announced today that Wells Fargo has begun a consumer redress review program through which customers who have not already been made whole through other remediation programs can seek to have their inquiry or complaint reviewed by a Wells Fargo escalation team for possible relief.

The consumer redress review program was a key component of Wells Fargo’s overall $535 million settlement with New Jersey, 49 other states and the District of Columbia in 2018 to resolve claims that the bank violated state consumer protection laws through multiple unlawful actions.

Those actions included (1) opening millions of unauthorized accounts and enrolling customers into online banking services without their knowledge or consent, (2) improperly referring customers for enrollment in third-party renters and life insurance policies, (3) improperly charging auto loan customers for force-placed and unnecessary collateral protection insurance, (4) failing to ensure that customers received refunds of unearned premiums on certain optional auto finance guaranteed asset/auto protection (GAP) products, and (5) incorrectly charging customers for mortgage rate lock extension fees.

Continue reading Wells Fargo Consumer Redress Review Program
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Wells Fargo Bank Resolves Allegations the Company Engaged in a Variety of Sales, Lending, and other Improper Business Practices Reaches $575 Million Agreement

the staff of the Ridgewood blog

TRENTON NJ, Attorney General Gurbir S. Grewal announced today that New Jersey is among the states joining a settlement agreement with Wells Fargo Bank that resolves allegations the company engaged in a variety of sales, lending, and other improper business practices for more than a decade.

Under the settlement terms New Jersey will receive nearly $17 million. Wells Fargo’s total payment under the agreement is approximately $575 million, including distributions to other states, attorneys’ fees, and other payments. 

The alleged consumer protection violations in Wells Fargo’s sales, auto-lending, and mortgage-lending practices include (1) opening millions of unauthorized accounts and enrolling customers into online banking services without their knowledge or consent, (2) improperly referring customers for enrollment in third-party renters and life insurance policies, (3) improperly charging auto loan customers for force-placed and unnecessary collateral protection insurance, (4) failing to ensure that customers received refunds of unearned premiums on certain optional auto finance products, and (5) incorrectly charging customers for mortgage rate-lock extension fees.

Through this settlement with 50 states and the District of Columbia, Wells Fargo will also create a consumer redress review program through which consumers who have not been made whole through other remediation programs already in place can seek to have their inquiry or complaint reviewed by a bank escalation team for possible relief. To date, this settlement represents the most significant engagement involving a national bank by state attorneys general acting without a federal law enforcement partner. 

Wells Fargo has identified more than 3.5 million accounts where customer accounts were opened, funds were transferred, credit card applications were filed, and debit cards were issued without the customers’ knowledge or consent. The bank has also identified 528,000 online bill pay enrollments nationwide that may have resulted from improper sales practices at the bank. In addition, Wells Fargo improperly submitted more than 6,500 renters insurance and/or simplified term life insurance policy applications and payments from customer accounts without the customers’ knowledge or consent.

“Wells Fargo’s corporate culture led to repeated breaches of its customers’ trust,” said Attorney General Grewal. “This settlement should send a message to all financial institutions that they need to take steps to avoid similar consumer protection violations, because we stand ready to hold the financial industry accountable.”

The states allege that Wells Fargo’s senior management exerted significant pressure on middle management and line employees to generate sales, through the establishment of unrealistic sales goals and an incentive compensation program. These sales goals became increasingly hard to achieve over time, the states allege, and employees who failed to meet them faced potential termination and unfavorable reviews. As a result, employees routinely enrolled customers in checking and savings accounts, credit cards, debit cards, unsecured lines of credit and online bill pay services without their knowledge or consent.

The states also contend that Wells Fargo employees wrongly charged more than two million auto financing customers premiums, interest, and fees for forced-place collateral protection insurance, even though this insurance duplicated coverage the customers already had in place. As a result, Wells Fargo has agreed to provide remediation of more than $385 million to approximately 850,000 auto finance customers. The remediation will include payments to over 51,000 customers whose cars were repossessed.

According to the states, Wells Fargo also failed to provide proper refunds to auto finance customers who had purchased Guaranteed Asset Protection insurance policies, designed to address situations in which a car buyer/borrower ends up owing more than a vehicle’s value. As a result, Wells Fargo has agreed to provide refunds totaling more than $37 million to certain auto finance customers. 

Finally, the states alleged that Wells Fargo improperly charged residential mortgage consumers for rate lock extension fees. With rate lock extension, borrowers could “lock in” an ostensibly favorable interest rate, for a fee, even if their loans did not close within the defined rate lock period. The states determined that some bank branches were charging rate lock extension fees even when the delay was caused by Wells Fargo, a practice contrary to the company’s policy. The bank has identified and contacted affected consumers and has refunded or agreed to refund over $100 million of such fees.

Wells Fargo has previously entered into consent orders with federal authorities – including the Office of the Comptroller for the Currency (OCC) and the Consumer Finance Protection Bureau (CFPB) – related to its alleged conduct. Wells Fargo has committed to or already provided restitution to consumers in excess of $600 million through its agreements with the OCC and CFPB as well as through settlement of a related consumer class-action lawsuit, and will pay over $1 billion in civil penalties to the federal government. Additionally, under an order from the Federal Reserve, the bank is required to strengthen its corporate governance and controls, and is currently restricted from exceeding its total asset size.

As part of its settlement with the states, Wells Fargo has agreed to implement within 60 days a program through which consumers who believe they were affected by the bank’s conduct, but fell outside the prior restitution programs, can contact Wells Fargo to be reviewed for potential redress. Wells Fargo will create and maintain a website for consumers to use to access the program and will provide periodic reports to the states about the program’s progress.

More information on the redress review program, including Wells Fargo escalation phone numbers and the website address will be available on or before February 26, 2019.

The $17 million Wells Fargo payout to New Jersey is the sixth highest amount recovered among all jurisdictions participating in the multi-state settlement

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Is that ATM safe to use? Maybe not…

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By Ted Sherman | NJ Advance Media for NJ.com

ENGLEWOOD—The bank robbery occurred at the Citibank branch in a quiet North Jersey suburb.There were no alarms, no guns, no menacing notes and no threats of violence. More than $52,000 was taken and the bank in Englewood didn’t even know it had been robbed until long after the cash went out the door.

That same day in December 2012, just a week before Christmas, the same guys hit another Citibank in Florham Park. And over the next three weeks they would target additional branches of the bank in New Jersey and New York—walking away with more than $1 million in cash taken from Citibank ATM machines through hundreds of counterfeit bankcards encoded with personal information stolen from unsuspecting customers.

http://www.nj.com/news/index.ssf/2016/03/is_that_atm_safe_to_use_watch_a_team_rig_a_cash_ma.html?ath=9c46bfc08d76232bb5a5e00eeaf0bfa2#cmpid=nsltr_strybutton

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Garrett Calls “Too-Big-To-Fail” a virus in our banking system and says Dodd-Frank increased the likelihood that taxpayers will be on the hook for additional Wall Street bailouts

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January 16,2016

the staff of the Ridgewood blog

Ridgewood NJ, In November  Rep. Scott Garrett (NJ-05), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, questioned Federal Reserve Chair Janet Yellen about the Fed’s use of cost/benefit analyses on new regulations. Chair Yellen testified before the House Financial Services Committee today and admitted to Rep. Garrett that the Fed has no plans to conduct an economic analysis that would determine the cumulative impact that hundreds of new rules prescribed by Dodd-Frank and the Basel Committee will have on the economy.

Garrett spoke earlier last year saying “ the Dodd-Frank Act was signed into law amidst promises that the legislation would protect American consumers, make our economy more competitive, and end ‘too big to fail.’ Instead, Dodd-Frank has stifled economic growth, made it more difficult for Main Street businesses to obtain credit, and increased the likelihood that taxpayers will be on the hook for additional Wall Street bailouts. Most importantly, this law has and has made it harder for Americans to find a job, buy a home, and save money for their family’s future.

“Despite creating new bureaucracies that have imposed thousands of pages of rigid, invasive, and unworkable regulations, Dodd-Frank did nothing to reform the mortgage giants Fannie Mae and Freddie Mac, whose actions caused the 2008 financial crisis. Now more than ever we need solutions that expand economic freedom and opportunities for hard-working American taxpayers. I look forward to working with my colleagues in order to protect our economy from the harsh reality of Dodd-Frank.”

“I believe we have a virus in our banking system that is stifling competition and innovation. It protects incompetent management and insulates antiquated business models from market discipline. It incentivizes the largest banks to grow even larger and makes these mega-banks captive to government influence. This “Too-Big-To-Fail” virus is now poised to spread beyond banks to other types of financial firms. Not surprising, it is the government that is preparing to label other financial firms “Too-Big-To-Fail” by designating them as systemically important and spreading these market distortions.

 

The Spectacular Too Big Failure of Dodd-Frank

Quick-to-fix regulation often creates unintended consequences
Dodd-Frank ultimately destroyed the community bank
Consumers lost choice and completion, although farmers were hurt most

By Edward Morrissey

February 12, 2015

Not much unites the activist Left and activist Right, and not much ever has. After the near-collapse of the fiscal sector in 2008, though, populist movements on both sides found momentum in opposition to government bailouts of private-sector firms, especially in the financial industry.

“Too big to fail” became a mantra used to leverage massive taxpayer bailouts of financial institutions. Those bailouts enraged conservatives who believed that government had largely created the “too big to fail” players that needed rescuing from bad government policy. At the same time, progressives angrily denounced the parachutes provided to Wall Street fat cats while ordinary Americans suffered through a period of tight lending and a poor economy — especially in the labor markets.

By the time 2010 rolled around, the two sides could agree on one thing: changes were necessary to unwind “too big to fail.” Conservatives wanted to push government out of lending and finance through tax and regulatory reforms that would end rent-seeking behaviors that perpetuated it. Progressives wanted more regulation and government intervention to force the industry to behave better.

Since Democrats controlled Congress and the White House in the spring and summer of 2010, they chose the progressive policy. Congress passed and President Barack Obama signed the Dodd–Frank Wall Street Reform and Consumer Protection Act in July of that year – not long after passing the progressive Affordable Care Act that created massive government intervention in the health-insurance industry.

For the past eighteen months, the news media has focused on the failures and incompetence of the Obama administration in the ACA’s rollout and infrastructure. The impact of Dodd-Frank has largely been ignored, until now. According to a new study by the Harvard Kennedy School of Business, the attempt to end Too Big to Fail backfired – in a big way.

One problem that led to TBTF was industry consolidation, which had been steadily reducing the number of smaller community banks that made lending much more accessible to small business owners, farmers, and middle and working-class families. Over the past twenty years, the share of US lending handled by community banks has fallen by half, from 41 percent to 22 percent, while the share handled by large banks more than doubled from 17 percent to 41 percent.

http://www.thefiscaltimes.com/Columns/2015/02/12/Spectacular-Way-Too-Big-Failure-Dodd-Frank

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Paramus’ Hudson City merger deadline put back 4 months

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Paramus’ Hudson City merger deadline put back 4 months

DECEMBER 10, 2014    LAST UPDATED: WEDNESDAY, DECEMBER 10, 2014, 1:21 AM
BY HUGH R. MORLEY
STAFF WRITER |
THE RECORD

* M&T extends $3.7 billion Hudson City deal to April 30 as Fed reviews would-be buyer’s money-laundering controls

The deadline for the $3.7 billion merger between Hudson City Bancorp Inc. of Paramus, New Jersey’s largest bank, and Buffalo-based M&T Bank Corp. has been held up for a third time, the lenders said Tuesday, extending the longest delay for any bank tie-up since the financial crisis six years ago.

With a Dec. 31 deadline looming, the banks said the merger, first announced in August 2012, would have to be completed by April 30, the companies said in a release. When the deal was first announced, it was the biggest takeover of a U.S. bank in 2012, according to Bloomberg News data.

The deadline extension follows similar announcements in August 2013 and January of this year. Bank mergers have generally taken longer to complete since the financial crisis, as regulators have placed more scrutiny and requirements on prospective partners. However, experts said the M&T-Hudson City deal is taking far longer than normal, even by current standards, and perhaps longer than any bank merger in memory.

http://www.northjersey.com/news/business/merger-tied-up-3rd-time-1.1149488

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Martin Armstrong Warns Civil Unrest Is Rising Everywhere: “This Won’t End Pretty”

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Martin Armstrong Warns Civil Unrest Is Rising Everywhere: “This Won’t End Pretty”

Submitted by Tyler Durden on 06/29/2014 16:40 -0400

The greatest problem we have is misinformation. People simply do not comprehend why and how the economic policies of the post-war era are imploding. This whole agenda of socialism has sold a Utopian idea that the State is there for the people yet it is run by lawyers following their own self-interest. The pensions created for those in government drive the cost of government up exponentially with time. The political forces blame the rich and this merely creates a class warfare with no resolution for the future. Even confiscating all the wealth of the so-called rich will not sustain the system. Consequently, we just have to crash and burn and start all over again.

The Guardian reported that some 50,000 people marched in London to protest against austerity. They cried: “Who is really responsible for the mess this country is in? Is it the Polish fruit pickers or the Nigerian nurses? Or is it the bankers who plunged it into economic disaster – or the tax avoiders? It is selective anger.”

The exploitation by the bankers has been really a disaster. They have been their own worst enemy and in the end, they have become the symbol that inspires class warfare if not revolution. They are not the representatives of those who produce jobs. They are merely those who wanted to trade with other people’s money for free. When they win, it is their’s, but any losses are passed to the taxpayers. Bankers should be bankers – not hedge fund managers who keep 100% of the profits using other people’s savings.

http://www.zerohedge.com/news/2014-06-28/martin-armstrong-warns-civil-unrest-rising-everywhere-wont-end-pretty