Do you have a credit card?
If you do, chances are, because you do…
You know just how shady some credit card company practices can be.
[via NYTimes] Capital One, one of the nation’s biggest banks, will reimburse $150 million to more than two million customers for selling them credit card products they could not use or did not want, as the nation’s new consumer watchdog leveled its first enforcement action against the financial industry.
The Consumer Financial Protection Bureau on Wednesday hit Capital One with findings that a vendor working for the bank had pressured and deceived card holders into buying products presented as a way to protect them from identity theft and hardships like unemployment or disability.
The regulatory actions, totaling $210 million including fines to authorities, take aim at one of the financial industry’s growing profit centers and increasingly controversial practices.[Read More]
And when it comes to shady credit card practices?
Some are far shadier than others!
[via NYMag]HSBC’s troubles had to escalate this week, with a Senate committee dropping a 335-page report[PDF] that accused the bank of helping Mexican drug cartels launder money and doing business with terrorist-affiliated banks in the Middle East, among a litany of other very bad things.
A year-long investigation by a Senate subcommittee produced the report, which turned up evidence that HSBC had willingly turned a blind eye to shady activities carried out under its purview, including a transfer of billions of dollars in suspected drug money through the bank’s U.S. division.
The report also implicated the Treasury Department’s Office of the Comptroller of the Currency, which is supposed to police things like money laundering, for failing to step in earlier. Senator Tom Coburn said that the OCC had acted as a “lapdog, not a watchdog” by failing to catch HSBC in the act.
The scandal at HSBC, which doesn’t yet pass the Aunt Deborah test, has already claimed one executive – David Bagley, the firm’s head of compliance, who announced in the middle of a Senate hearing yesterday that he was stepping down.
At that hearing, a group of HSBC executives expressed contrition for the bank’s lapses in judgment, but offered a good explanation for why they hadn’t stopped drug lords in their tracks. They were just too busy, you see:
Among those testifying was Paul Thurston, an HSBC executive who was HSBC’s Mexico chief executive during a period in 2007 when law-enforcement concerns about drug cartel laundering became known to the bank. Mr. Thurston, now an executive with HSBC in Hong Kong, acknowledged uncovering some of the suspicious accounts, noting that some of what he found “took my breath away.”
But he said some of the problems arose because HSBC Mexico was a fast-growing unit that handled its anti-money-laundering screening at each of its 1,300 branches. He said he moved to try to centralize such operations but that the bank struggled to respond to suspicious transaction alerts, which sometimes came in at the rate of 1,000 a week.
Good thing the government is there…
To save the day?
Cause no, it’s not ever shady…
[via WP]NEW YORK — The companies that determine Americans’ credit scores are about to come under scrutiny by the country’s new consumer watchdog.
The Consumer Financial Protection Bureau said Monday that it will start supervising the 30 largest firms that make up 94 percent of the industry. That includes the three big credit reporting firms: Equifax Inc., Experian and TransUnion.
This marks the first time that a single government agency will take an active role in policing credit bureaus, according to industry experts. The Fair Credit Reporting Act currently requires them to keep accurate information about consumers.
Richard Cordray, the government agency’s director, said in a speech Monday that the CFPB said its oversight may include on-sight examinations, and that it may require credit bureaus to file reports.
“It’s a wonderful thing for the American public,” said Pamela Banks, the senior policy counsel for Consumers Union, the policy arm of Consumer Reports. “Now there’s somebody on their side.”
Each of the three major credit reporting agencies maintains files on more than 200 million Americans. These reports are filled with a history of loan payments, credit card accounts and other financial details. Past behavior, from late payments to credit-card balances, is used to create a credit score. [Read More]
A government oversight committee…
Overseeing credit card companies.
This will work out well.
*shakes head sadly*