Enforcement actions

The National Credit Union Administration placed the New Jersey credit union into conservatorship Monday, citing its "unsafe and unsound practices."

The company agreed to pay a $750,000 to address claims it steered consumers into high-cost loans from affiliated lenders. It will also reimburse consumers $646,000 in fees.

The $6.4 million-asset institution was placed in conservatorship in January and is the first credit union to be liquidated this year.

The Texas-based institution is the third credit union to be taken over by regulators this year.

The agency's new leadership, which has already unwound numerous actions from the prior administration, said the January 2020 guidance implementing criteria for punishing firms that mistreat customers was “inconsistent with the bureau’s duty to enforce Congress’s standard.”

The bank must submit a plan for improving its risk management and decreasing its commercial real estate exposure, the Federal Reserve said in an enforcement order.

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Interim CFPB Director Dave Uejio expressed concern that financial institutions have dragged their feet in resolving disputes with consumers for service issues during the pandemic.

Dave Uejio, acting director of the Consumer Financial Protection Bureau, promised to protect veterans from predatory loans and to crack down on companies that improperly garnish stimulus checks or mistreat struggling borrowers.

The McLean, Va.-based company admitted that it failed to file suspicious activity reports even in cases when it knew about criminal charges against specific customers. The misconduct took place in a unit that served check-cashing businesses and was later shut down.

In placing the $6.6 million-asset institution in conservatorship, the regulator has taken charge of two credit unions in just the first two weeks of the year.

The Office of the Comptroller of the Currency terminated a 2015 consent order that required the bank to improve its controls for combating money laundering.

The agency said Omni Financial in Las Vegas illegally required service members to designate a portion of their paychecks to repay loans, depriving of them of other payment options.

The Consumer Financial Protection Bureau is headed for more disruption in the new year with a Democratic administration likely to reverse several GOP-backed policies. More aggressive relief for mortgage borrowers, a rollback of Trump-era rulemakings and yet another realignment of CFPB offices will all be on the table.

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The Consumer Financial Protection Bureau said that the Dallas-based auto lender knowingly supplied inaccurate consumer data to the three major credit reporting agencies.

The consumer bureau said the bank’s migration to a new servicing platform led to unauthorized payment withdrawals, misrepresentations about what borrowers owed and violations of a prior 2015 enforcement action.

The Federal Reserve and the New York State Department of Financial Services have ordered the Swiss bank’s U.S. arm to improve oversight and better monitor the activities of its customers.

The bank's release from a five-year-old enforcement action would mark progress in CEO Charlie Scharf's efforts to resolve its sprawling regulatory problems. But 10 more consent orders, including an asset cap imposed by the Federal Reserve in 2018, remain in place.

A number of top Wells executives privately expect it won’t be able to escape the limit on assets until late next year at the earliest, while key Fed officials see the process dragging into 2022 or beyond, according to people familiar with their thinking.