Friday, April 20, 2012

Bank of America among banks scrutinized for overdraft marketing

Welcome to the morning roundup. Here's a look at what's news in banking and finance.

Overdraft marketing. Bank of America and eight other banks are being scrutinized by the Consumer Financial Protection Bureau over how they market overdraft protection on their checking accounts, Bloomberg reports. The Dodd Frank financial reform law already tweaked the rules on the products, requiring customers to actively opt-in instead of being automatically enrolled. Besides marketing, the CFPB is also looking at the size of the overdraft fee, which generally is about $35.

Student loans. To pay back tens of thousands in student debt, more grads are putting off marriage and children to get their finances in order, the Wall Street Journal reports. At the same time, default rates on private student loans are twice their prerecession levels.

Short sales. Bank of America is allowing more short sales than any other bank, according to data from RealtyTrac, Bloomberg says. Total U.S. short sales are up more than 30 percent from a year ago, and are expected to set a record.

Volcker delay. The Federal Reserve and other agencies confirmed Thursday that Wall Street will have two years to comply with Volcker Rule provisions, which largely bank proprietary trading, The New York Times reports. The rule technically takes effect July 21, and some banks worried they wouldn't be given enough time to comply.


Garth Vader said...

In a quiet office in downtown Charlotte, N.C., dozens of Wells Fargo’s foreclosure foot soldiers sit in cubicles cranking out documents the bank relies on to seize its share of the thousands of homes lost to foreclosure every week.

They stare at computer screens and prepare sworn affidavits that are used by lenders in courts across the country to seize homes. Paid $30,700 to start, these legal process specialists, the title that goes with the job, swear an oath under penalty of perjury that they're corporate vice presidents. They're peppered with e-mails from managers to meet daily quotas of at least 10 or 11 files day.

If they fall short, they face a verbal warning. Then written. Two written warnings could cost them the paycheck that supports a family. As more than one source for this story told, "I can't afford to lose this job."

Pressured to meet daily production quotas, they are likely making mistakes that inadvertently could toss a family out of its home and onto the street, according to these workers.

State and federal prosecutors, in a recent settlement with five banks that included Wells Fargo, agreed. The joint state and federal settlement spelled out how the document procedures at the five banks resulted in “loss of homes due to improper, unlawful or undocumented foreclosures,” according to the complaint.

"These are mistakes that could cost someone their home," a Wells Fargo document preparer told

The Wells Fargo worker, who first contacted via email in late January, told of a wide range of concerns about the foreclosure documents she processes. Some families apparently were denied loan modifications after only cursory interviews, she said. Other borrowers applying for help sent comprehensive personal financial documents to a fax machine that she discovered had been unattended for weeks. Others landed in foreclosure after owing interest payments of as little as $1.18 a day, according to documents she said she reviewed.

Dolley said...

Dolley said...

Bank of America has been caught repeatedly forging and backdating documents to foreclose on homes they don't own, ignoring rules designed to protect servicemen and women, corrupting land records and creating schemes to avoid paying land transfer fees to municipalities, laying off 50,000 employees in order to give Moynihan a 500% raise as a reward for a ONE CENT rise in the stock price - yet all of the sudden they have a crisis of conscience regarding firearms??? Sounds like an "Inside (hand) Job" to me... (I guess Obama only thinks fire arms are good for Mexican drug lords) or maybe BofA knows that their reign of terror will quickly come to an end when people start firing back (literally).

Read more: