The Federal Deposit Insurance Corp. (FDIC) this month announced a settlement with Arkansas-based Bank of England over alleged violations of the Federal Trade Commission Act, the Real Estate Settlement Procedures Act (RESPA), the Fair Credit Reporting Act (FCRA) and the Home Mortgage Disclosure Act (HMDA).
The bank has been issued an order to pay a civil penalty of $1.5 million, and the FDIC has also issued similar enforcement actions to nine former employees of the bank.
“Veterans and their families who were deceived into refinancing their VA loans were overcharged and did not receive the loan products promised, resulting in significant consumer harm,” Mark Pearce, director of FDIC’s division of depositor and consumer protection, said in a statement. “[This] announcement demonstrates FDIC’s commitment to ensuring consumers are treated fairly, and that those responsible, including the bank and individuals employed by the bank, are held accountable for their illegal actions.”
Among the alleged offenses, FDIC said it determined “the bank brokered certain reverse mortgage loans where broker fees made to the bank constituted things of value provided in return for loan referrals in violation of RESPA Section 8.”
Other alleged violations levied by the FDIC include that “the bank, through one of its loan production offices (LPOs), violated [the law] by misrepresenting to consumers that they would be able to skip multiple loan payments when refinancing a Department of Veterans Affairs (VA) mortgage loan,” the FDIC said. The FDIC also determined that loan officers or LPOs misrepresented their relationships with the VA to consumers.
FDIC also alleges that the bank “entered into certain co-marketing arrangements and marketing service agreements” in which the bank and real estate brokers would “market their services together using online platforms.”
“The FDIC determined and the Bank neither admits nor denies that the Bank’s mortgage division, commonly known as Bank of England Mortgage, engaged in violations of law and regulation,” the settlement agreement stated.
The FDIC also levied individual enforcement actions against nine former employees of the bank for “luring consumers to apply for mortgage loans with low, unavailable loan prices that would not be honored and then subsequently increasing the price before closing the loan; misrepresenting that consumers could skip two months of their mortgage payments; and misrepresenting the LPO’s affiliation with the VA,” FDIC alleged.
Two of the alleged violators will pay at least $100,000 each in their individual cases.
RMD attempted to reach a representative for the Bank of England but did not receive a response.
