The refunds will go to as many as 2.9 million people who were deceived into signing up for products such as credit monitoring and identity theft protection or were improperly charged for such services, the Consumer Financial Protection Bureau said.
The action was part of a crackdown by the bureau on deceptive marketing, enrollment and billing practices related to such so-called add-on products by credit card companies. Bank of America is the fifth financial services company to be hit with fines and refund orders.
“Bank of America both deceived consumers and unfairly billed consumers for services not performed,” said Richard Cordray, the bureau’s director. “We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market.”
Bank of America agreed to the refunds and penalties without admitting or denying the allegations. In addition to the refunds, the bank will pay a $20-million civil penalty to the bureau and a $25-million civil penalty to the Office of the Comptroller of the Currency.
Senate Democrats will huddle Thursday to determine whether to trigger the “nuclear option” to ram through nominees with a simple majority vote.
Senate Majority Leader Harry Reid (D-Nev.) announced Tuesday that he planned to meet with his colleagues in two days, at which point a decision will be made on whether to change the upper chamber’s filibuster rules with the controversial tactic.
“I’m going to caucus on this Thursday, and I think Thursday by the time the day is out, you’ll have a better idea of what we’re going to try and do on this,” he told reporters.
Reid is facing pressure to advance several stalled nominees by making a Senate rule change that would eliminate filibusters on nominees. Typically, a change to Senate rules requires 67 votes, but the parliamentary maneuvering of the nuclear option would require only a majority vote.
Thursday’s meeting will be Reid’s final chance to determine how badly his colleagues want to push several stalled presidential nominees, including Tom Perez, President Obama’s pick to head the Labor Department, and Richard Cordray, who was renominated to continue as director of the Consumer Financial Protection Bureau (CFPB).
While the GOP War on Women has justifiably received some attention, the GOPteabag party’s other war, or one of its other wars, has not gotten the attention it deserves. This war against consumers has been going on for years, if not decades, in one form or another. But in the past few years the war’s main battle concerns the creation, by Congress after the 2008 financial crisis, of the Consumer Financial Protection Bureau. Conservatives in Congress and in throughout wingnut world hate it. They have prevented the appointment of a permanent head for the Bureau, an important obstruction by itself, but also a maneuver designed to extract significant concessions over the Bureau’s authority.
Via Balloon Juice comes this report from Adam Serwer at Mother Jones :
Senate Republicans want three big changes before they’ll stop blocking Cordray. First, they want the CPFB to be by Congress rather than the Federal Reserve. Subjecting the bureau to the congressional appropriations process would compromise its political independence. Second, Republicans want the range of financial institutions the bureau has authority to regulate narrowed. This would leave unsupervised some of the problematic institutions the bureau was created to regulate. The GOP also wants to replace the single director with a board of directors, which would hamper the ability of the bureau to make decisions. Finally, the GOP is demanding that other bank regulators—the same ones who failed to prevent the 2008 financial meltdown—be allowed to chaperone the CFPB by ‘verifying’ that its rules ‘would not harm the safety and soundness of banks.’ This would let regulators who turned a blind eye to exploitative practices in the past because they were profitable tell the CFPB what to do—and the more different regulators have to approve of a rule, the more convoluted and less effective it is likely to be.
Blocking Cordray could leave the CPFB without most of its powers to regulate the very financial institutions whose practices helped lead the country into near-economic collapse in 2008. That’s just how Republicans want it. Having failed to prevent the financial regulation law from being passed, they are now seeking to nullify it through procedural extortion.
This hatred of the CFPB is just really bizarre. In a normal world, a political party that so despised the interests of the population on behalf of the very privileged few would face significant penalties. For sowing the wind, it should reap the whirlwind. But even with its recent election defeats, it continues to possess considerable power and high levels of devotion from people who should know better, if not for themselves, at least for the benefit of others.
It would also be comforting to know our “liberal” mainstream media was on the case. But I’m sure they have more “critical” and entertaining things to report to us on.
he Consumer Financial Protection Bureau will announce Tuesday that it’s considering new rules aimed at mortgage servicers to help protect consumers against “costly surprises.”
The bureau’s new rules will require servicers to issue mortgage statements that are more clear, as well as better disclosures about any fees or changes in a loan’s interest rate.
“For too long, mortgage servicers have not been held accountable to their customers, and the result has been profoundly punishing to homeowners in distress,” said Richard Cordray, director of the consumer bureau in a statement issued Monday. “It’s time to put the ‘service’ back in mortgage servicing.”
This would be the federal government’s first major move to crack down on the entire mortgage servicing industry, including big banks that service mortgages, since the housing bust and resulting financial crisis.
Does mortgage principal reduction work?
The new rules coincide with new standards set forth by a large settlement deal between states attorneys general and the five largest mortgage servicing banks. Those standards only impact the five largest banks and are aimed at halting robosigning and other improper foreclosure practices on homeowners who are late with payments.
The Consumer Financial Protection Bureau’s rules would ask all servicers to ensure better transparency for all borrowers — not just those whose loans are delinquent. The rules would take effect next January, according to the bureau.
After months of criticism that Republicans are holding up President Obama’s judicial nominees, Senate Majority Leader Harry Reid now plans to force back-to-back votes in what could be a political showdown later this week.
Reid (D-Nev.) took a highly unusual step Monday of launching the process for Senate approval of 17 judges as soon as Wednesday. Under the Senate’s complex rules, breaking the Republican-led filibuster could take weeks. The Democratic leader had been threatening to ramp up the nomination approval process to confront what Democrats say is GOP obstruction.
“Republicans have refused to allow us to vote - won’t even allow us to vote - on these qualified judicial nominees,” Reid said from the Senate floor. “What else can we do?”
Republicans swiftly pounced on the effort, with Sen. Mike Lee (R-Utah) calling it “nothing more than a political stunt.”
Republican senators have warned they will slow-walk presidential nominees after Obama made an end run around the Senate to appoint Richard Cordray to the head the new consumer protection bureau over Republican objections earlier this year when Congress was not in session.
ALMOST everyone agrees about one thing these days: Congress is malfunctioning. To help our representatives escape from their current morass, I suggest that they read “An Essay on Bargaining,” the classic 1956 article by Thomas Schelling, the Nobel laureate economist. It is profound, and it doesn’t contain a single equation.
The article’s primary theme is that the key to success in many bargaining situations is the ability to commit to a future course of action. In this analysis, the Senate “won” the payroll tax cut showdown late last year by passing a bill and then going home for the holidays. This was a highly credible “take it or leave it” offer.
This ability to commit can help solve games in which the two players must choose between strategies: either they cooperate or they “defect,” as a decision not to cooperate is called in the literature. They are much better off if they both cooperate, but there is always a temptation to defect when the other player cooperates, scoring a big win at the other player’s expense.
When this game is played repeatedly, a natural — and often successful — strategy is called tit for tat. You begin by cooperating, hoping for the best. If the other side cooperates, too, all is good. But if it defects, you retaliate. And once the retaliating starts, it is hard to stop.
When I asked a former Republican senate staff member to explain why so many qualified Obama administration nominees were being denied confirmation hearings, he told me, “We are tatting.”
Last year has to be one of the worst episodes of senatorial tatting in history. Extraordinary nominees like Peter A. Diamond, the Nobel laureate economist who was nominated twice to the Federal Reserve Board of Governors, and Dr. Donald M. Berwick, a leading authority on evidence-based medicine, nominated to head Medicare and Medicaid, never got an up-or-down vote. (Dr. Berwick served for a while after receiving a recess appointment.)
Turning down such experts’ offers to help is like declining an offer from Phil Jackson to help coach your high school’s basketball team.
Even more worrisome was the failure to confirm Richard Cordray, a former Ohio attorney general, to the Consumer Finance Protection Bureau. In this case, many Senate Republicans did not deny that he was qualified; they said they just didn’t like the agency and refused to confirm anyone to run it. The president has responded by making an unusual type of recess appointment of Mr. Cordray. Republicans are furious because they thought they had blocked such a move by holding “pro forma” sessions, in which the sole business conducted was to adjourn for a few days. Expect each side to argue that the other is behaving unreasonably.
Perhaps the refusal to confirm Mr. Cordray was simply follow-through on the publicly stated goal of Senator Mitch McConnell, the Republican minority leader, to assure that President Obama is a one-term president.
But I have a question for Senator McConnell: If you achieve your goal and a Republican is elected president. what will happen then? Won’t Senate Democrats take it up a notch? If they don’t like the new president’s foreign policy, for example, they could refuse to confirm a secretary of defense, citing the Cordray case as a precedent, and leading to either more recess appointments or 24/7 sessions for the Senate.
THE CONSUMER Financial Protection Bureau was approved by Congress, signed into law by President Obama, and set up by Elizabeth Warren. But Republican opponents are still trying to thwart an agency they don’t like: They’re refusing to approve anyone to run it until Obama agrees to limit the agency’s oversight of financial institutions. At the very least, Richard Cordray, whose nomination to head the bureau was thwarted by a GOP filibuster this week, knows that it isn’t really about him.
Democrats believe that they already made compromises in the legislation creating the bureau and that Republicans are now obliged to endorse their highly qualified nominee. (Cordray is a former attorney general of Ohio, and helped Warren set up the bureau.) Republicans want more changes to the bureau’s authority, claiming that there are still concerns about the extent of its jurisdiction.
Even if those concerns were valid, refusing to confirm anyone at all to the post is a misuse of congressional authority; it’s akin to refusing to confirm anyone as secretary of state to protest a president’s foreign policy. The only realistic solution would be for President Obama to grant Cordray a temporary recess appointment. This wouldn’t be an act of petulance: Many of the bureau’s actions require a director to sign off on them.
To head off the recess appointment, Republicans say they might use a procedural tactic known as a “rump” session to keep Congress working, so that it never technically goes into recess, thereby denying Obama the chance to make a recess appointment.