Banks Press CFPB in Talks
Wall Street Journal
December 14, 2011
Timiraos, Nick; Simon, Ruth; Fitzpatrick, Dan
The five largest mortgage banks -- Ally Financial Inc., Bank of America Corp.,
Citigroup Inc., J.P. Morgan Chase & Co., and Wells Fargo & Co. -- the
Obama Administration, and state attorneys general are working on an agreement to
settle claims related to the use of "robo-signing," in which employees approved
documents without proper review, and other questionable foreclosure practices.
However, the settlement, which could be worth about $19 billion, could be held
up as banks seek broad releases from state and federal authorities, including
the Consumer Financial Protection Bureau, that would relinquish the authorities'
right to sue over flawed mortgage originations. The CFPB is said to be resisting
the banks' demands that it forgo the authority to sue, but banks say that
without the release the deal is dead. Because Republicans have not confirmed the
CFPB director nominee, Richard Cordray, he was unable to participate in
negotiations and the agency would not have the authority to agree until
mid-July. Negotiations with CFPB were halted when Congressional members
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