Now that we’re halfway through 2012, it’s time to take a look back at some of the breaking financial news that kept us glued to the various stock tickers and and provided either hope or lack of for a better 2012. You might find a different perspective.
Here’s what we reported this past December:
Thanks to the new Consumer Financial Protection Bureau (CFPB), efforts are underway to make those terms and conditions that come with our credit cards much clearer. The goal is less confusing verbiage, and instead, clear language that gets to the point and explains exactly what the contract means.
On December 7th, the first draft was released. It’s currently being reviewed by both consumers and card companies. There are just 1,099 words – compared to the traditional contract that easily surpassed 5,000 words; no confusing legal terms, either.
Not only was CFPB successful in its efforts of overhauling terms and conditions, but it also put in its credit card complaint database – both moves have proven very successful. Score one for the American consumer!
Part of our report from December:
The U.S. Justice Department announced Bank of America had been ordered to pay $355 million to resolve allegations that one of its subsidiaries, Countrywide, issued discriminatory mortgage loans.
At one point, Countrywide Financial was considered the nation’s largest mortgage lender. Now, though, a new scandal has erupted. Accusations are the lender bought major influence on Capitol Hill by allowing several hundred “sweetheart loans” for not only members of Congress, but their families and staff members.
The investigation began three years ago and was led by Darrell Issa, the same one who aggressively pursued Eric Holder in recent weeks to turn over documents associated with the Fast and Furious scandal. It’s been dubbed the “VIP program” or the “Friends of Angelo” program and included rapid loan approval, low interest rates and using underwriting standards that were questionable.
BoA Debit Card Fees
One year ago, Bank of America announced it would be implementing a $5 debit card fee for the majority of its customers. The exceptions were those with high bank balances or multiple accounts such as mortgages, CDs or other products. This is when bank customers – not only Bank of America’s customers, but those with other big banks such as JPMorgan Chase -left in droves and found their way to their local credit unions.
Eventually the banks rescinded these debit card usage fees, but the damage is done as consumers say they’re happy with doing business with their credit unions.
In June 2011, JPMorgan was ordered to pay $153.6 million to settle charges it misled investors in the sale of a complex mortgage-backed security. The charges were the result of a 2007 sale of a collateralized debt obligation, or CDO, that JPMorgan Securities marketed to investors without disclosing that a hedge fund involved in the creation of the CDO was betting it would decline in value, according to the SEC. The $1.1 billion CDO in question- called “Squared CDO 2007-1″ -was designed to allow investors to make bets on the housing market.
A series of derivative transactions involving credit default swaps were entered into as part of the bank’s “hedging” strategy. The original estimated trading loss of $2 billion was announced, with the final actual loss expected to be significantly higher.
Currently there are a number of investigations moving forward and in July, a U.S. judge ordered the bank to explain why it shouldn’t be required to turn over emails as part of an investigation into whether it manipulated electricity markets in California and the Midwest.
It’s incredible how fast things can change – or don’t change – in just six months.
- FTC Warns of Prepaid Card Scams – May 23, 2013