Federal Reserve Board Levies Civil Money Penalties Against Five Banking Organizations

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The Federal Reserve Board recently terminated enforcement actions against ten banks.  In the process, it imposed fines totaling $35.1 million upon five of the banks in connection with alleged residential mortgage loan servicing and foreclosure processing deficiencies.

The enforcement actions began in 2011 and 2012.  Consent orders were issued against the ten institutions, which denied that any wrongdoing had taken place.  Fines had previously been assessed against five of the institutions involved.  The $35.1 million in new penalties brings the total to approximately $1.1 billion that the Federal Reserve has assessed against Federal Reserve supervised firms in connection with mortgage servicing.

The 2011 and 2012 consent orders required the ten institutions to improve oversight over their residential mortgage loan servicing, and required those with mortgage servicing subsidiaries to correct residential mortgage loan servicing and foreclosure processing deficiencies.  Along with the five new fines, the termination orders acknowledged that all of the institutions had taken steps to address the risks associated with the conduct identified in the previous consent orders.

The announcement from the Federal Reserve Board is available here: https://www.federalreserve.gov/newsevents/pressreleases/enforcement20180112a.htm.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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