Banking Law

US Suit Accuses Wells Fargo of ‘Reckless Trifecta’ in FHA-Insured Mortgages

The U.S. government has filed a civil suit claiming Wells Fargo engaged in reckless lending, leaving the Federal Housing Administration on the hook when buyers couldn’t pay government-insured mortgages. The suit filed by U.S. Attorney Preet Bharara claims the bank recklessly issued the mortgages and then falsely certified them as…

Oct 10, 2012 11:32 AM CDT

Critical of Claims Based on ‘Sheer Speculation’, Federal Judge Nixes Suit Against Billionaire Banker

A federal judge in New York has tossed a fraud lawsuit that alleged a banker conspired with others to forge the signature of a dying cousin to protect a ranch in Arizona from a creditor. U.S. District Judge Colleen McMahon in Manhattan characterized aspects of the suit against Herbert A.…

Sep 28, 2012 11:02 AM CDT

Student Debt Reaches Record Levels, a Burden in 1 in 5 Households

An analysis by the Pew Research Center has found that one in five households in the United States is burdened with student debt. The 2010 student debt figures are double from 1989 and up 15 percent from 2007, the Associated Press reports. The AP says the growth in student debt…

Sep 27, 2012 4:46 PM CDT

3 States Sign On to Challenge Dodd-Frank Law

Attorneys general from Michigan, Oklahoma and South Carolina have joined a lawsuit that challenges the constitutionality of the 2010 Dodd-Frank law overhauling financial oversight practices in the United States and creating the Consumer Financial Protection Bureau. The conservative Competitive Enterprise Institute and a small bank in Texas filed the suit…

Sep 24, 2012 10:52 AM CDT

Rep. Maxine Waters Cleared of Ethics Allegations

U.S. Rep. Maxine Waters, a Democrat from California, will not be charged with ethics violations, the House Ethics Committee announced Friday. A senior Democrat on the Financial Services Committee, Waters was accused of directing a financial bailout to a bank whose investors included her husband, the Associated Press reports. The…

Sep 21, 2012 3:25 PM CDT

City Attorney Seeks Payday-Loan Claimants with Intern’s ‘Pay Me Maybe’ Video

An Oct. 1 deadline is looming for some California consumers to file claims under a statewide settlement with two payday loan companies. That fact is being publicized in a new video called “Pay Me Maybe,” according to the San Francisco Chronicle blog SF Gate, the Huffington Post and the San…

Sep 19, 2012 10:30 AM CDT

Citibank Says It Had No Duty to Warn Ex-Partner About Dewey Finances

Sued by Citibank for defaulting on a $209,000 loan he used to finance his capital contribution to Dewey & LeBoeuf, a former partner of the defunct law firm last month fired back in a federal court motion seeking summary judgment and claiming fraudulent inducement. Citibank, ex-partner Steven Otillar contends, helped…

Sep 17, 2012 5:52 PM CDT

Ex-Lawyer Steven Lippman Gets 3 Years, Says Ex-Partner Scott Rothstein ‘Played Me Like a Fool’

A newly disbarred South Florida lawyer was sentenced Friday to three years in federal prison, in the latest fallout from the implosion of the Rothstein Rosenfeldt Adler law firm operated by convicted Ponzi schemer Scott Rothstein, who is also disbarred and serving a 50-year federal prison term. Although Steven Lippman,…

Sep 14, 2012 6:19 PM CDT

Ex-Banker Birkenfeld Gets $104M for UBS Case Cooperation; May Be Biggest US Whistleblower Award

Sentenced to a 40-month federal prison term in 2009 for his role in a tax evasion conspiracy involving offshore American accounts, former Swiss banker Bradley Birkenfeld elicited sympathetic comments from some observers who said the hefty sentence was likely to discourage other whistleblowers from cooperating with the government. But the…

Sep 11, 2012 4:22 PM CDT

Former Dewey Partner Alleges He and Others Were ‘Fraudulently Induced’ to Get Citibank Loans

After being sued by Citibank for allegedly defaulting on a loan, a former partner of Dewey & LeBoeuf is firing back with a claim that he and others were “fraudulently induced” into signing up for bank loans to finance their capital contributions to the law firm. In a motion filed…

Aug 31, 2012 8:01 PM CDT

Citigroup to Settle Investor Suit over CDO Losses for $590M

Citigroup has agreed to pay $590 million to settle an investor lawsuit that claims the bank failed to disclose its holdings in collateralized debt obligations backed by subprime mortgages. Citigroup denied wrongdoing and said it settled because of the uncertainties and expense of litigation, report the Wall Street Journal (sub.…

Aug 30, 2012 2:46 PM CDT

Bank Fires Customer Rep for Using Fake Dime at Laundromat in 1963, Cites New Regulations

Fearful of $1 million-a-day fines under new regulations, banks have fired thousands of employees, according to a California lawyer who has helped some of the workers regain their jobs. New regulations adopted in May 2011 and in February bar banks from employing anyone convicted of a crime involving dishonesty, breach…

Aug 30, 2012 12:35 PM CDT

Bank Sends Foreclosure Notice to Woman Who Made $70K in Payments for House She Didn’t Own

A Pennsylvania woman is suing her lender and a former lawyer for Ohio Bar Title Insurance after learning she has made nearly $70,000 in payments for a house she doesn’t own. Sheila Layo claims the lawyer, closing agent Richard Hallock, never recorded the deed or mortgage for her Scranton townhouse…

Aug 27, 2012 12:54 PM CDT

Law Firm Sues Regions Bank over Alleged Paralegal Pilfering

A Nashville law firm has sued Regions Bank in an effort to recover law firm money deposited by a paralegal accused of embezzling $126,000. The Fisher Law Group alleges paralegal Timothy Sharpe deposited checks written to the law firm into his personal account at the bank over the course of…

Aug 23, 2012 12:09 PM CDT

Payday Lenders Using Courts to Create Modern-Day Debtors’ Prisons in Missouri, Critics Say

A practice in Missouri of summoning debtors to civil court for an “examination” is resulting in arrests and prompting critics to complain about modern-day debtors’ prison tactics in the state. While Missouri’s Bill of Rights explicitly declares “no person shall be imprisoned for debt, except for nonpayment of fines and…

Aug 20, 2012 10:52 PM CDT