New York AG: Big Banks Still Offending Post-Settlement
According to New York’s attorney general, the country’s biggest banks didn’t get their fill of lawsuits after last year’s $25 billion settlement over deficient lending practices. The clock is now ticking for several banks as AG Eric Schneiderman preps his case against Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) with monitors and other state attorneys general.
Would banks possibly try to sidestep the obligations put in place during last year’s huge settlement? According to the exclusive Reuters report, BofA and Wells Fargo have racked up up 339 mortgage practice violations since last October, with the lion’s share (210) in Wells Fargo’s corner. That’s why Schneiderman is prepping to sue them regardless of what happens in the coming months. He sent a letter to the monitor for the settlement in order to start the timeline in which the other offenders can right the ship and avoid being sued again by New York’s AG.
Since suits against BofA and Wells Fargo are a foregone conclusion, that puts JPMorgan (NYSE:JPM) and Citigroup (NYSE:C) in the hot seat. Both banks have an unspecified time frame in which they must correct their deficient lending practices in order to avoid having another suit come their way via Schneiderman or the attorney general of other states. According to reports, there are numerous states willing and able to come at them with a suit.
“Several other states have identified similar recurring deficiencies by the participating servicers,” wrote Schneiderman to the settlement’s monitor. Ally (NYSE:GKM) was the fifth bank in the $25 billion settlement of last year, so it, too, might be vulnerable to regulators’ legal efforts in the months ahead.
Of all the companies on the radar of state attorneys, Bank of America and JPMorgan might have the most to lose. For Morgan, one lawsuit after another has plagued the company in the wake of its London Whale fiasco. Its contentious shareholder meeting this week in Tampa endorsed the tenure of CEO Jamie Dimon, yet the pressure on the bank is unrelenting. BofA, for its part, hoped to get past its suits to get back to profiting on a regular basis. That effort will have to wait a little while longer.