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Top Story Compliance Related

02/14/2007

Chicago bank pays $4.1M CMP for deceptive practices

The Board of Governors of the Federal Reserve System has announced a consent order to cease and desist and civil money penalty assessments totaling $4,110,000 against Cole Taylor Bank of Chicago, Illinois, related to the participation by the bank and its agent, Higher One, Inc. of New Haven, Connecticut (Higher One), in deceptive practices in violation of section 5 of the Federal Trade Commission Act. Higher One, under Cole Taylor's oversight, offered students a deposit account and debit card product known as OneAccount. The FRB determined that, at various points in the financial aid refund selection process, students were mislead about the OneAccount by:

  • The omission of material information about how students could get their financial aid refund (the amount of financial aid in excess of tuition and school fees) without having to open a OneAccount
  • The omission of material information about the fees, features, and limitations of the OneAccount product
  • The omission of material information about the locations of ATMs where students could access OneAccount without cost and the hours of availability of those ATMs
  • The prominent display of the school logo, which may have erroneously implied that the school endorsed the OneAccount product

Under the Order, which was issued jointly with the Illinois Department of Financial and Professional Regulation, Division of Banking, the bank remains contingently liable for up to an additional $30 million in required restitution if Higher One cannot pay any amounts of restitution that Higher One may be required to pay for the benefit of consumers who opened OneAccounts at Cole Taylor under the terms of any enforcement action by the Board of Governors against Higher One. Finally, the Board's press release stated that actions are also pending against another state member bank that has a similar arrangement with Higher One relating to OneAccounts.

02/14/2007

Consumer Compliance Outlook

The Second Quarter 2014 issue of Consumer Compliance Outlook is now available online, featuring these articles:

  • Risk-Focused Consumer Compliance Supervision Program for Community Banks
  • Risk-Focused Supervision Webinar Questions and Answers
  • News from Washington
  • On the Docket
  • Consumer Compliance Risk Management for Social Media

02/14/2007

FEMA suspending communities

The Federal Emergency Management Agency has published three final rules identifying communities where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on the effective dates listed below because of noncompliance with the floodplain management requirements of the program.

  • July 7, 2014—communities in Massachusetts, Rhode Island, Delaware, Georgia; Kentucky, North Carolina, Indiana, Minnesota, Texas, Nebraska, and Idaho
  • July 16, 2014—communities in Massachusetts, Pennsylvania, Indiana, Michigan, Louisiana, and Kansas
  • August 4, 2014—communities in Michigan, Kansas, and North Dakota

02/14/2007

HELOC 'end-of-draw' guidance

Four federal financial institutions regulatory agencies and the Conference of State Bank Supervisors (CSBS) today issued guidance to financial institutions regarding home equity lines of credit (HELOCs) nearing their "end-of-draw" periods, when the principal amount of the HELOC must begin to be repaid. The guidance encourages financial institutions to effectively communicate with borrowers about the pending reset and provides broad principles for managing risk as HELOCs reach their end-of-draw periods. Three of the agencies issued separate industry announcements on the Guidance:

02/14/2007

Mortgage lender pays $48,000 for Fair Housing violation

HUD has announced that Greenlight Financial Services, an Irvine, California-based mortgage lender, will pay $48,000 to settle allegations that it violated the Fair Housing Act when it denied or delayed mortgage loans to women because they were on maternity leave.

02/14/2007

Chicago bank pays $4.1M CMP for deceptive practices

The Board of Governors of the Federal Reserve System has announced a consent order to cease and desist and civil money penalty assessments totaling $4,110,000 against Cole Taylor Bank of Chicago, Illinois, related to the participation by the bank and its agent, Higher One, Inc. of New Haven, Connecticut (Higher One), in deceptive practices in violation of section 5 of the Federal Trade Commission Act. Higher One, under Cole Taylor's oversight, offered students a deposit account and debit card product known as OneAccount. The FRB determined that, at various points in the financial aid refund selection process, students were mislead about the OneAccount by:

  • The omission of material information about how students could get their financial aid refund (the amount of financial aid in excess of tuition and school fees) without having to open a OneAccount
  • The omission of material information about the fees, features, and limitations of the OneAccount product
  • The omission of material information about the locations of ATMs where students could access OneAccount without cost and the hours of availability of those ATMs
  • The prominent display of the school logo, which may have erroneously implied that the school endorsed the OneAccount product

Under the Order, which was issued jointly with the Illinois Department of Financial and Professional Regulation, Division of Banking, the bank remains contingently liable for up to an additional $30 million in required restitution if Higher One cannot pay any amounts of restitution that Higher One may be required to pay for the benefit of consumers who opened OneAccounts at Cole Taylor under the terms of any enforcement action by the Board of Governors against Higher One. Finally, the Board's press release stated that actions are also pending against another state member bank that has a similar arrangement with Higher One relating to OneAccounts.

02/14/2007

Consumer Compliance Outlook

The Second Quarter 2014 issue of Consumer Compliance Outlook is now available online, featuring these articles:

  • Risk-Focused Consumer Compliance Supervision Program for Community Banks
  • Risk-Focused Supervision Webinar Questions and Answers
  • News from Washington
  • On the Docket
  • Consumer Compliance Risk Management for Social Media

02/14/2007

FEMA suspending communities

The Federal Emergency Management Agency has published three final rules identifying communities where the sale of flood insurance has been authorized under the National Flood Insurance Program (NFIP) that are scheduled for suspension on the effective dates listed below because of noncompliance with the floodplain management requirements of the program.

  • July 7, 2014—communities in Massachusetts, Rhode Island, Delaware, Georgia; Kentucky, North Carolina, Indiana, Minnesota, Texas, Nebraska, and Idaho
  • July 16, 2014—communities in Massachusetts, Pennsylvania, Indiana, Michigan, Louisiana, and Kansas
  • August 4, 2014—communities in Michigan, Kansas, and North Dakota

02/14/2007

HELOC 'end-of-draw' guidance

Four federal financial institutions regulatory agencies and the Conference of State Bank Supervisors (CSBS) today issued guidance to financial institutions regarding home equity lines of credit (HELOCs) nearing their "end-of-draw" periods, when the principal amount of the HELOC must begin to be repaid. The guidance encourages financial institutions to effectively communicate with borrowers about the pending reset and provides broad principles for managing risk as HELOCs reach their end-of-draw periods. Three of the agencies issued separate industry announcements on the Guidance:

02/14/2007

Mortgage lender pays $48,000 for Fair Housing violation

HUD has announced that Greenlight Financial Services, an Irvine, California-based mortgage lender, will pay $48,000 to settle allegations that it violated the Fair Housing Act when it denied or delayed mortgage loans to women because they were on maternity leave.

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