CFPB Continues Crackdown On Big Banks

By October 5, 2014 No Comments

CFPB Continues Crackdown On Big Banks

Flagstar Bank of Maryland has been hit with a massive fine ($10M) and will be forced to pay $27.5M in restitution to almost 7000 of its borrowers, after being cited by the CFPB for a string of poor business practices that led to an estimated 2000 unnecessary foreclosures. According to CNN:


The agency cited Flagstar for a long list of failures, including:

  • Taking so long to review loan adjustment applications that the documents would expire and the application would be closed.
  • Taking too long to approve or deny a loan modification with foreclosure just days away.
  • Failing to notify borrowers their applications were incomplete, which a bank is required to do.
  • “Routinely miscalculating” borrower income, and therefore wrongfully denying modifications.”


The list goes on and on. The announcement came just days after U.S. Bank was similarly ordered to pay almost $60M in refunds and fines. Since the CFPB’s creation, it has ordered almost $5B in customer refunds from banks and other financial institutions.

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