On May 17, 2024, the FDIC announced that a settlement was reached with Bank of England, England, Arkansas, for violations of Section 5 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). Nine former employees of the Bank of England have also stipulated to individual enforcement actions.
FDIC Division of Depositor and Consumer Protection Director Mark Pearce said the following in a statement:
“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. Today's 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.”
The FDIC Found that the Bank of England:
Violated FTC Section 5 by misrepresenting to consumers that they would be able to skip multiple loan payments when refinancing a Department of Veterans Affairs (VA) mortgage loan;
Violated RESPA Section 8:
entering into certain co-marketing arrangements and marketing service agreements in which the bank and real estate brokers agreed to market their services together using online platforms;
entering into desk rental agreements whereby the bank rented space from realtors, and entered into agreements with online/digital platforms for lead generation, which resulted in the payment of fees by the bank to real estate brokers and online/digital platforms for their referrals of mortgage loan business; and
brokering certain reverse mortgage loans where broker fees made to the bank constituted things of value provided in return for loan referrals;
Failed to provide consumers with firm offers of credit and required disclosures as required by the FCRA; and
Failed to report accurate data on its 2021 loan application register in violation of HMDA.
The Bank has agreed to pay $1.5 million in civil money penalty. The bank is also ordered to take affirmative steps to ensure a Compliance Management System that effectively identifies, addresses, monitors, and controls consumer protection.
Read the FDIC’s press release here.