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Summer Suits: Legal Woes Rise with Temperatures

A steady stream of subpoenas, crackdowns and settlements involving big banks indicates that regulators are continuing to work through a big backlog of cases related to the housing downturn and financial crisis. Other investigations involve brand new issues, like payday lending and debt collection. One certainty: For banks litigation risk keeps on rising.

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What the Deloitte Crackdown Means for Banks

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It all Began With... It all Began With... The summer scandals kicked off on June 18 when Benjamin Lawsky, head of New York's Department of Financial Services, fined Deloitte Financial Advisory Services $10 million in connection with its anti-money-laundering advisory work for Standard Chartered in 2004 and 2005. Third-party oversight is now a huge issue for banks. Lawsky also hit Bank of Tokyo-Mitsubishi UFJ with a $250 million settlement over money-laundering allegations.

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Bank of Tokyo Mitsubishi Fined $250M for Sanctions Violations

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PNC Faces DOJ-CFPB Probe PNC Faces DOJ-CFPB Probe Aug. 9 - The Justice Department and Consumer Financial Protection Bureau filed civil suits against the Pittsburgh bank, claiming its National City mortgage unit charged higher interest rates on home loans "to a protected class of borrowers." Separately, the U.S. Attorney's Office for the Southern District of New York is investigating PNC's foreclosure expense claims on loans backed by Fannie Mae, Freddie Mac and the Federal Housing Administration.

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JPMorgan Probes Pile Up JPMorgan Probes Pile Up Aug. 8 - The regulatory crackdown on JPMorgan Chase (JPM) reached a fever pitch with new civil and criminal investigations into allegations of wrongdoing in the sale of $850 million in securities backed by residential loans. JPMorgan is already operating under four enforcement orders, more than any other U.S. bank. Two each are related to the 2012 "London Whale" trading fiasco and alleged anti-money-laundering lapses.

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Mortgage Suits Against B of A, Citi, Others May Proceed: Judge

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JPMorgan Redux JPMorgan Redux But wait, there's more. JPMorgan is also facing newly disclosed probes into its delinquent debt collection practices. The Office of the Comptroller of the Currency and CFPB are pursuing administrative orders related to the bank's collection practices and sales of credit card debt. The investigations also involve alleged lax oversight of third parties in the sale of identity-theft products.

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Chase Halts Card Debt Sales Ahead of Crackdown

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Payday Lender Scrutiny Payday Lender Scrutiny Aug. 7 - Third party oversight rears its head again. New York's top financial regulator is cracking down on payday lenders that allegedly are trying to skirt state caps on interest rates. NY Superintendent Benjamin Lawsky is back, this time pressuring banks to adopt policies and procedures to stop payday lenders from taking payments directly from consumers' bank accounts.

Related Articles: Banks Drafted into N.Y.'s Battle with Online Payday Lenders

Lawmakers Call for Stronger Rules on Deposit Advance Products

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DOJ Charges Bank of America DOJ Charges Bank of America Aug. 6 - The Justice Department and Securities and Exchange Commission filed civil lawsuits against Bank of America (BAC) alleging investors were misled about the quality of residential loans backing $850 million in mortgage securities. The case involves prime jumbo mortgages securitized by B of A (not its much-maligned Countrywide unit.) B of A says it will fight the charges, claiming that ecause sophisticated investors had ample access to underlying data.

Related Article: DOJ Adds Former Countrywide Exec to B of A Mortgage Suit

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UBS Settles with SEC UBS Settles with SEC Aug. 6 - UBS agreed to pay $50 million to settle Securities and Exchange Commission allegations that it misled investors in a complex mortgage security. That may not seem like much but last month UBS reached an $885 million settlement with the Federal Housing Finance Agency to resolve claims related to Fannie Mae and Freddie Mac securities.

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FHFA's Lawsuits Against Banks Are Timely, Appeals Court Rules

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A steady stream of subpoenas, crackdowns and settlements involving big banks indicates that regulators are continuing to work through a big backlog of cases related to the housing downturn and financial crisis. Other investigations involve brand new issues, like payday lending and debt collection. One certainty: For banks litigation risk keeps on rising.

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