Newspaper article Sarasota Herald Tribune

End of 2013 Means It's Time to Clean Up Banks' Messes

Newspaper article Sarasota Herald Tribune

End of 2013 Means It's Time to Clean Up Banks' Messes

Article excerpt

MAJOR FINANCIAL INSTITUtions that operate in Southwest Florida ended the year by making deals to resolve legal issues.

Wells Fargo on Dec. 30 announced a $591 million settlement with Fannie Mae over obligations related to loans that went bad after the housing bubble burst.

The agreement with the second-largest bank operating in Florida covers loans made beginning in 2008. Wells Fargo says it resolves nearly all repurchase liabilities it has with Fannie Mae, the federal mortgage buyer.

The bank said it has already set aside the money for the payment.

Wells Fargo in September agreed to pay $869 million to Freddie Mac, another government-sponsored mortgage firm, to settle similar claims.

Bank of America, Citigroup and JPMorgan Chase are among other giant lenders that settled mortgage claims with Fannie Mae in 2013.

Meanwhile, PNC Financial Services Group will pay $35 million to settle government claims of discrimination in residential loans against a bank it bought four years ago. The agreement with the U.S. Justice Department and the federal Consumer Financial Protection Bureau involved allegations that more than 75,000 African-American and Latino customers of National City Bank paid more for their residential loans between 2002 and 2008.

PNC, based in Pittsburgh, bought National City in 2009. The discrimination allegations targeted National City, not PNC.

National City operated a wealth management office in Sarasota that PNC acquired. PNC later bought RBC Bank, which gave it retail bank offices in the region.

On another front, credit card giant American Express will spend $75.7 million to stop an investigation into what regulators called "misleading marketing" of some discontinued card products.

The company reached the pre-Christmas agreement with the CFPB, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp.

The agencies contend that American Express misled consumers that an account protection product they purchased would work for up to two years, when the benefits usually expired within three months. Consumers also complained about confusion over the enrollment process for the product, which was intended to protect against identity theft. …

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