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June 24, 2013 5:52 AM Age: 7 yrs

Study Finds Banks Still Making it Difficult for Borrowers

Category: Larry Checco
Source:  Larry Checco, president, Checco Communications

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The banking industry still can’t get it right.

The Washington Post recently reported that a new study found that the nation’s biggest banks—those, so-called too big to fail—have been violating the terms of the US$25 billion national mortgage settlement, a landmark agreement to clean up shoddy foreclosure practices.

According to the study, released by the court-appointed monitor of the agreement, and which supports complaints by state prosecutors, Citigroup, Bank of America, Wells Fargo, JP Morgan, among other institutions, are:

  • Failing to notify homeowners of any missing documents in their mortgage modification requests within five days.
  • Providing inaccurate information to borrowers before beginning foreclosure.
  • Not providing a single point of contact to borrowers, but rather bouncing them around to different bank employees.
  • Initiating foreclosure while simultaneously negotiating a modification, a practice known as dual tracking.
  • Improperly charging borrowers for a type of mortgage insurance.

What’s with these guys and gals anyway!  Haven’t they done enough damage, and caused enough pain, to the lives of millions of Americans?!

The Brookings Institution, a credible Washington think tank, recently hosted an event entitled "Dealing with 'Too Important to Fail' Banks," which explored the issue of whether or not big banks should be broken up. 

Note:  It was discovered that before holding the event, Brookings had debated whether to title the event “Too Big” or “Too Important to Fail” and decided on the latter.  In my opinion they should have gone with “Too Big and Self-important to Jail.”  But let’s move on.)\

The Brookings panel included the chairman of a prestigious DC law firm, obviously representing the interests of the banking industry, who in his remarks stated that these institutions are important to our economy, should not be broken up and should not be subjected to “unbearable regulatory requirements.”

“Unbearable regulatory requirements”…..”UNBEARABLE REGULATORY REQUIREMENTS!!!!!!”

Given what we’ve learned about the financial industry in the aftermath of the Great Recession including:

Financial institutions like Capital One deceiving literally millions of its customers by pressuring or misleading them into buying credit card products they didn’t need or understand.

Goldman Sachs knowingly selling sure-to-fail bond holdings to their own customers (then betting against them!).

HSBC’s money laundering activities.

Barclay’s and other banks’ culpability in rigging the London interbank offered rate, or "Libor," just to mention a few, we should demand that regulators be looking over these guys’ shoulders whenever they’re having lunch or relieving themselves in the bathroom, for cryin’ out loud!

It’s gotten to the point where we hold this truth to be self-evident:  We cannot trust our financial industry to do the right things. 

In some respects it’s understandable.  When there are literally billions' of dollars to be fought over, we can’t expect one’s better angels to appear to help divvy up such massive sums fairly and equitably.

All the more reason to put surveillance cameras on all the foxes in the chicken coop—before there are no hens left to lay their golden eggs.

When challenged on the issue of the public’s lack of trust for the banking industry, the industry spokesman at Brookings came back with, “That’s what the banking industry needs to focus on….and they’re hearing this.”

Unfortunately, all the evidence proves otherwise.

Contents © 2013 by Larry Checco.

Larry Checco is president of Checco Communications.  His latest book is entitled Aha! Moments in Brand Management: Commonsense Insights to a Stronger, Healthier Brand.  Checco Communications is a consulting firm that specializes in branding.  It helps organizations clearly define who they are, what they do, how they do it and, most importantly, why anyone should care enough to support them. Where most branding professionals focus on making sure an organization has an attractive logo, catchy tagline and perhaps a marketing plan, Larry’s take is different.  His message is that good branding is far less about marketing, advertising and public relations and far more about quality leadership and staff, appropriate and ethical behavior, and an organization’s willingness, ability and commitment to live up to the promises, or covenant, its brand represents. His first book, Branding for Success: A Roadmap for Raising the Visibility and Value of Your Nonprofit Organization, has sold thousands of copies worldwide. Click here for full bio.


Published by: Corporate Governance & Accountability Advisors, Inc. Content & Concepts ©2008 by CG&AA, Inc. All rights reserved