Bank whistle-blowers urge strong federal enforcement

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Santander worker Quarlondra Coleman told how the bank extended delinquent auto loans again and again, in order to jack up interest and fees on the struggling borrowers.

“When they give out the extensions they push the money back out and make the metrics look good,” she said. “They often told us to submit as many extensions as possible so they could approve them.”

At Wells Fargo, former worker Kilian Colin said, “My job was to open new accounts even when it did not make sense for the customers’ needs.”

The whistleblower-type revelations appeared in a regulatory comment file that closed last week, attracting 103 commenters. Among them, six bank workers spoke out about wrongdoing they saw firsthand at Santander, U.S. Bank and Wells Fargo.

The eyewitness accounts inject a new voice into what is often boring reading. The official regulatory comments came in response to the Consumer Financial Protection Bureau’s call for input about how it investigates companies.

Specifically, the consumer bureau is looking at a legal tool called a “civil investigative demand” that agencies use to get information – documents, statements and electronic records – about company practices.

Financial industry seeks to put limits to CFPB’s regulatory investigations

Companies and industry groups called for the CFPB to moderate its demands for information, saying they are too broad and burdensome.

An attorney for RD Legal Funding said investigations should be put on hold if a company objects to the investigative demand. RD Legal is being sued by the agency and the New York attorney general for allegedly scamming 9/11 responders and injured NFL retirees out of their compensation funds.

Consumer groups worried that the deregulation-minded head of the agency was using the comment process as cover to roll back its consumer protection powers.

The examination of this and other CFPB practices “seem geared toward compiling an industry wish list for weakening the agency rather than strengthening its work to protect consumers and the American public,” said a coalition of consumer and community groups.

Bank workers’ comments highlight need for consumer protections

The first specific question in the request for comments asks about the bureau’s delegation of the power to start investigations to officials in its enforcement department. Acting director John M. “Mick” Mulvaney has put his deregulatory stamp on the agency since being appointed by President Trump in November 2017.

The comments from bank workers inject a ground-level view of why consumers need a federal agency in their corner.

Rather than being an adversary of consumers, bank workers said management put them under pressure to carry out practices that were harmful to both customers and workers.

“[W]e would be pressured to make more than the allowed number of calls per day to a single customer or log false promises to pay so that we wouldn’t fall to the bottom of the [performance rankings,]” Coleman wrote.

Coleman and some of the other commenters identified their links to the Committee for Better Banks, an organization of bank workers aligned with labor and community groups.

Colin wrote that Wells Fargo management knew its practices were unfair to customers. “The Bank did not care! Open new accounts or be terminated!”

A co-worker opened an unauthorized new account for Colin in the first week of his employment. “After, I realized she was trying to keep her job,” he wrote.

See related: Fine against Wells Fargo: Is Mulvaney’s CFPB changing course?





Source : Creditcards