January 12, 2018
Federal Reserve Board announces termination of enforcement actions against 10 banking organizations, civil monetary penalties against five of the 10, and termination of two joint orders against service providers
For release at 11:00 a.m. EST
The Federal Reserve Board on Friday announced the termination of enforcement actions related to residential mortgage loan servicing and foreclosure processing issued in 2011 and 2012 against 10 banking organizations. The Board also announced civil money penalties totaling $35.1 million against five of these 10 organizations that had not yet been fined for their mortgage servicing deficiencies related to those enforcement actions.
When it issued the mortgage servicing enforcement actions, the Board announced that it believed monetary penalties were appropriate for all firms subject to the actions for their mortgage servicing deficiencies. The Board previously assessed penalties against the other firms under mortgage servicing enforcement actions. With the penalties announced today, the Board has now assessed penalties totaling approximately $1.1 billion against all Federal Reserve supervised firms under mortgage servicing enforcement actions.
The 10 banking organizations are: Ally Financial Inc.; Bank of America Corporation; CIT Group, Inc. (as successor to IMB HoldCo LLC); The Goldman Sachs Group, Inc.; HSBC North America Holdings, Inc.; JPMorgan Chase & Co.; Morgan Stanley; The PNC Financial Services Group, Inc.; SunTrust Banks, Inc.; and U.S. Bancorp. The actions required all of the firms to improve oversight of residential mortgage loan servicing and required the firms with mortgage servicing subsidiaries supervised by the Federal Reserve to correct deficiencies in residential mortgage loan servicing and foreclosure processing. The termination of the actions was based on evidence of sustainable improvements in the firms' oversight and mortgage servicing practices.
In addition, the Board announced the termination of a supplemental agreement with Ally, issued in 2012 after Ally's mortgage servicing subsidiaries sought bankruptcy protection, which addressed the parent company's contingent obligations under the 2011 enforcement action against Ally. This agreement is no longer necessary after the termination of the 2011 action announced on Friday.
The civil money penalties announced today are: $14 million against Goldman Sachs; $8 million against Morgan Stanley; $5.2 million against CIT (as successor to IMB); $4.4 million against U.S. Bancorp; and $3.5 million against PNC.
Also on Friday, the Board announced the termination by the Board and other federal financial regulatory agencies of joint enforcement actions issued in 2011 against Lender Processing Services, Inc. (LPS), which was succeeded by ServiceLink Holdings, LLC, and against MERSCORP Holdings, Inc., formerly known as MERSCORP, Inc. (MERS). These enforcement actions addressed deficiencies in the foreclosure-related services LPS and MERS each provided to entities regulated by the agencies. The Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation are parties to the action against LPS. Each of these agencies as well as the Federal Housing Finance Agency are parties to the action against MERS. The termination of the actions was based on evidence of sustainable improvements in the foreclosure-related practices of LPS and MERS.
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