U.S. Bank fined $15 million for bankruptcy filing violations

OCC announces fine for violations between 2009 and 2014

The Office of the Comptroller of the Currency announced Tuesday that it is ordering U.S. Bank National Association to pay a civil penalty of $15 million for what it calls “bankruptcy filing violations” that occurred between 2009 and 2014.

According to the OCC, an investigation found that between 2009 and 2014, U.S. Bank “engaged in filing practices in bankruptcy courts with respect to proofs of claim, payment change notices, and post-petition fees among others that did not comply with bankruptcy rules and constituted unsafe or unsound banking practices.”

More specifically, text from the OCC’s consent order states:

Between 2009 and 2014, the Bank committed various errors related to bankruptcy filings, including: (a) untimely, not filed, or inaccurately filed Proofs of Claim; (b) payment application inaccuracies resulting in overpayments by debtors or trustees; (c) untimely and/or inaccurate Payment Change Notices; (d) untimely, and/or inaccurate Post-Petition Mortgage Fees, Expenses, and Charges; (e) inaccurate Notices of Final Cure; (f) exposure of confidential customer information in court-filed documents; and (g) inconsistent application of the Bank’s fee waiver practices.

According to the OCC, U.S. Bank committed the violations while it was under the terms of an April 2011 mortgage servicing-related consent order, which was subsequently terminated in February 2016.

And because of those actions, which the bank neither admits nor denies, the OCC is fining U.S. Bank $15 million. According to the OCC, that money will be paid to the Department of the Treasury.

Additionally, the OCC said that as a result of the bank’s bankruptcy practices, U.S. Bank “has made or will make approximately $29 million in remediation to approximately 22,000 account-holders.”

The OCC consent order doesn’t provide much more in detail beyond that and a spokesperson for U.S. Bank said the company is happy to put this issue behind it.

“We are pleased to have resolved this matter with the OCC related to bankruptcy filing practices and processes,” Dana Ripley, U.S. Bank’s senior vice president of corporate communications, said in a statement to HousingWire.

“We have made the necessary enhancements to our systems and processes to ensure that the issues do not recur,” Ripley continued. “U.S. Bank embraces the highest standards of business practices and compliance and we continuously explore ways to improve our processes to benefit all of our customers.”

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please