It seems like there’s a new settlement with a major bank regarding past wrongdoings almost every week. On Thursday, January 22nd, the Consumer Financial Protection Bureau reached a settlement with Wells Fargo and JPMorgan for their participation in a “mortgage kickback” scheme. The megabanks agreed to pay almost $36 million in penalties to settle the kickback allegations.
The financial regulator alleged that employees with both banks made an illegal arrangement with a now-bankrupt Maryland mortgage title company, in which the title company provided cash, marketing materials and private consumer information in return for business from the bank.
In a statement Thursday morning, CFPB Director Richard Cordray noted: “These banks allowed their loan officers to focus on their own illegal financial gain rather than on treating consumers fairly. Our action today to address these practices should serve as a warning for all those in the mortgage market.”
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The terms of the settlement call for Wells Fargo to pay $24 million in civil penalties, while JPMorgan agreed to pay an additional $600,000 fine. The two banks will also provide $11.1 million in penalty funds to redress impacted consumers in Maryland and Virginia.
The more than a year long investigation by the CFPB determined that over 100 Wells Fargo loan officers in Maryland and Virginia actively participated in the illegal arrangement, as did another six loan officers from JPMorgan Chase.
As well as the settlement of the charges involving the two banks, the CFPB also announced on Thursday it was pressing charges against a former Wells Fargo employee, Todd Cohen, and his wife, Elaine Oliphant Cohen, for their involvement in the kickback scheme. The statement noted that the Cohens are also settling the charges against them, and have agreed to pay a $30,000 penalty.