uFour Years After Reaching Deal With Regulators, Six Banks Still Haven’t Fixed Foreclosure Problemsr

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  (jetsetpress)

  Back in 2011, several of the nation’s largest banks entered into a settlement with federal regulators that required the institutions to correct widespread foreclosure abuses that helped to trigger the housing crisis. While the agreement was revised in 2013 to make things a bit easier for the offending banks, regulators today announced that six of the lenders – including JPMorgan Chase and Wells Fargo – still haven’t met requirements and face new restrictions on their mortgage operations.

  The Office of the Comptroller of the Currency announced on Wednesday that JPMorgan, Wells Fargo, Santander, HSBC, US Bank and EverBank must abide by revised consent orders that impose limitations on the ways in which the lenders can conduct certain mortgage-related business activities.

  The restrictions were handed down after the OCC determined that the banks hadn’t done enough to comply with enforcement orders related to past home foreclosure abuses such as mishandling loan papers, robo-signing legal documents, and improperly initiated foreclosures without reviewing each individual case.

  Morris Morgan, the OCC’s deputy comptroller for large banks tells the Wall Street Journal that the regulator expects lenders to meet requirements in “months, not years” and that the office was “not satisfied with where [lenders] are at this at this point in time.”

  While the restrictions don’t affect mortgages that the banks issue themselves, they do limit the banks’ ability to acquire residential mortgage servicing or residential mortgage servicing rights from other companies.

  Additionally, the lenders are limited in outsourcing or sub-servicing of new residential mortgage servicing activities to other parties and appointing senior officers responsible for residential mortgage servicing or residential mortgage servicing risk management and compliance, the OCC order states.

  The OCC says that the banks face varying restrictions based on their particular circumstances, but didn’t elaborate in the announcement.

  However, the WSJ reports that HSBC and Wells Fargo encountered the harshest limits, as both are prohibited from increasing the size of their mortgage book though the purchase of servicing rights or entering into new contracts to do servicing for other parties.

  JPMorgan, Santander, US Bank and EverBank must obtain approval from the OCC to take such action.

  “In all cases, OCC examiners will continue to oversee these institutions’ corrective actions and mortgage servicing activities as part of the agency’s ongoing supervision,” the announcement states.

  Not all of the banks that signed on to the 2011 and 2013 agreements have failed in meeting their obligations.

  The OCC announced Wednesday it would terminate orders against Bank of America, Citibank and PNC Bank after the lenders complied with their initial orders. Foreclosure-related consent orders against Aurora Bank, FSB, and MetLife Bank, were prevoiusly lifted.

  To date, the OCC says it has provided more than $2.7 billion to more than 3.2 million eligible borrowers as a result of agreements with lenders.

  Still, the regulator says it was unable to distribute about $280 million and would hand the funds over to states in an attempt to find the affected homeowners.

  U.S. Restricts Six Banks Over Mortgage Problems [The Wall Street Journal]
  OCC to Escheat Funds from the Foreclosure Review, Terminates Orders Against Three Mortgage Servicers, Imposes Restrictions on Six Others [Office of the Comptroller of the Currency]

  
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by Ashlee Kieler via Consumerist

uNYC Officials Take 496 Uber Cars Off The Streets For Illegally Picking Up Passengers On The Streetr

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  (JLaw45)

  Every city has its own rules on how Uber drivers are allowed to operate, and in New York City that means black and livery cars can’t cruise around trying to pick up passengers on the streets. As such, officials impounded the cars of 496 Uber drivers this spring in a crackdown on illegal pickups.

  The New York Post cites data from the Taxi and Limousine Commission that says almost 500 cars currently affialiated with Uber’s bases were seized between April 29 and June 15 for picking up illegal street hails.

  Black and livery car drivers are restricted to pre-arranged trips, whether a customer calls in a request or makes a request on their smartphone, though many may be familiar with that little, “beepbeep” many black cars make when trying to get the attention of someone trying to hail a yellow cab.

  “Street hails are not permitted on the Uber platform — period,” the company’s spokesman Matt Wing told the New York Post. “This is a small group of bad actors and the violations add up to less than one hundredth of 1% of our rides over the same time period.”

  The New York Taxiworkers Alliance says business is worse because there’s no limit to how many Uber drivers are roaming the streets, and wants the TLC to put a cap on their numbers.

  “I think it’s honestly a reflection of the oversaturation of the vehicles, and the desperation everyone is feeling on the streets to earn a living,” said a union rep for both yellow cab and Uber drivers. Beyond a cap on drivers, she wants the Uber app to provide a minimum fare requirement and a guaranteed number of trips.

  “At least they’re beginning to take action,” she added.

  A change in policy has seen a total of 938 black and livery cars taken off the streets, after the TLC switched from handing out a summons to drivers to the new impound system.

  “Our officers noted an uptick in illegal activity attributable to licensed for-hire vehicles acting outside their authority,” said a TLC spokesman. “And seizures have a greater deterrent value than summonses alone.”

  496 Uber cars seized amid crackdown on illegal pickups [New York Post]

  
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by Mary Beth Quirk via Consumerist

uThe First Complaint Of Net Neutrality Violation Is In, And It’s Against Time Warner Cabler

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  (Photo Nut 2011)

  
  Net neutrality only went into effect last Friday, but the first formal complaint against an ISP for breaking the rule is already on its way. The target? Time Warner Cable.

  The complaint comes from a video streaming service in San Diego, the Washington Post reports.

  Commercial Network Services (CNS) operates a number of webcams on the west coast. They live-stream events like the Fourth of July fireworks, and have a large following who like to watch the comings and goings of U.S. Navy vessels in San Diego. And according to CNS, Time Warner Cable is asking them to pay up or else viewers will get degraded service.

  CNS chief executive Barry Bahrami told the WaPo, “This is not traffic we’re pushing to Time Warner; this is traffic that their paying Internet access subscribers are asking for from us.” He said that TWC’s actions are a “blatant violation” of the Open Internet Rule and that his company will be formally filing a complaint “in the next couple days, tops.”

  TWC says it’s a peering dispute — basically, the same problem Netflix has run into. CNS doesn’t meet the criteria for a settlement-free peering deal (one in which no cash changes hands), they say.

  In a statement to the Post, Time Warner Cable representatives said, “TWC’s interconnection practices are not only ‘just and reasonable’ as required by the FCC, but consistent with the practices of all major ISPs and well-established industry standards.”

  The company added, “We are confident that the FCC will reject any complaint that is premised on the notion that every edge provider around the globe is entitled to enter into a settlement-free peering arrangement.”

  Time Warner Cable will be the first to get hit with a net neutrality complaint [Washington Post]

  
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by Kate Cox via Consumerist

uStudy: Walmart Has $76 Billion In Assets Sitting In Offshore Tax Havensr

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  (JeepersMedia)

  A new report says Walmart owns more than $76 billion of assets, but it’s not sitting around anywhere in the United States. Rather, the assets are held by at least 78 offshore tax havens around the world, none of which are mentioned in U.S. securities filings.

  A study by the the United Food & Commercial Workers International Union published today [PDF] in a report by Americans for Tax Fairness says that all of Walmart’s 3,500 stores or so in China, Central America, the U.K., Brazil, Japan, South Africa and Chile seem to be owned through subsidiaries in places like the British Virgin Islands, Curacao and Luxembourg.

  A total of 90% of Walmart’s overseas assets are owned by units in Luxembourg — where the company doesn’t have any stores — and the Netherlands, according to publicly available documents the study used for its research.

  A Walmart spokesman told Bloomberg that the report is incomplete and “designed to mislead” by its union authors, and says the company has “processes in place to comply with applicable SEC and IRS rules, as well as the tax laws of each country where we operate.”

  He adds that guidance issued by the SEC allows companies to avoid disclosing subsidiaries with significant “intercompany transactions,” and that Walmart paid $6.2 billion in U.S. income tax last year, or “nearly 2 percent of all corporate income tax collected by the U.S. Treasury.”

  The advocacy group called out one strategy that Walmart uses in Luxembourg, where the company created 20 new subsidiaries since 2009, is known as a hybrid-loan. Under this system, companies’ offshore units can take tax deductions for interest paid to their parents in the U.S., though the parent doesn’t include that interest as taxable income in the U.S.

  Americans for Tax Fairness is now urging officials to take action: In the U.S., it wants the SEC to ask Walmart to explain its failure to disclose its 78 subsidiaries and branches in tax havens, and require it to make a a complete list of its business entities public, so investors can make informed decisions based on the company’s tax practices.

  The group also urges the the Internal Revenue Service to audit Walmart’s use of subsidiaries in tax havens, “including the transfer of billions of dollars to its tax-haven subsidiaries and its use of various financial instruments to move taxable income out of the United States,” the report says, and analyze its short-term offshore loans that fund some of its U.S. operations to determine whether or not Walmart has been avoiding paying taxes in the U.S.

  Across the pond, the group says the European Commission should “determine whether Luxembourg has been providing Walmart with sweetheart tax deals equivalent to illegal state aid.”

  It wouldn’t be the first time — Bloomberg notes that the EU has issued preliminary findings that other companies have been using similar strategies, including Starbucks in the Netherlands and Apple in Ireland.

  The Walmart Web: How the World’s Biggest Corporation Secretly Uses Tax Havens to Dodge Taxes [Americans for Tax Fairness]
  Wal-Mart Has $76 Billion in Undisclosed Overseas Tax Havens [Bloomberg]

  
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by Mary Beth Quirk via Consumerist

uAT&T Faces $100M Fine Over “Unlimited” Data Plansr

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  (Mike Mozart)
  

  Last year, the Federal Trade Commission sued AT&T over its alleged failure to disclose to subscribers of “unlimited” data plans that their data might actually be throttled. The future of that case is in limbo right now, but today the Federal Communications Commission announced its intention to fine AT&T $100 million over its unlimited data plans.

  When AT&T was the exclusive launch partner of the Apple iPhone, many subscribers signed on to data plans that put no limits on monthly data use. But when the iPhone became available on other carriers like Verizon, AT&T eventually stopped offering these plans but allowed existing unlimited subscribers to continue under certain conditions.

  However, users who actually tried to utilize the “unlimited” aspect of their plans found that they faced the threat of having their data speeds heavily throttled by up to 80-90%.

  Following thousands of complaints from AT&T customers, an investigation concluded that AT&T failed to adequately notify its customers that they could receive speeds slower than the normal network speeds the company advertised.

  One issue for the FCC is that AT&T didn’t just slow down speeds to normal network rates, but at speeds as slow as 1/20 that of normal speeds, leaving the service effectively unusable. Additionally, throttled customers were penalized for upwards of 12 days out of a month, meaning subscribers were paying full price for unlimited data plans that may not have been available for nearly half a month.

  The FCC’s enforcement action accuses AT&T of violating the transparency portion of the 2010 Open Internet Order — a section of the rule that wasn’t struck down by the court in 2014.

  The Open Internet Transparency Rule requires broadband providers to publicly disclose sufficient and accurate information about the providers’ network management practices, performance, and commercial terms of their services. Customers need this information to make informed choices when choosing a data plan, either wireless or fixed.

  “Consumers deserve to get what they pay for,” said FCC Chairman Tom Wheeler. “Broadband providers must be upfront and transparent about the services they provide. The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure.”

  While AT&T has previously characterized throttling of heavy users as reasonable network management, a senior FCC official clarifies that the action is about the company’s alleged failure to disclose the throttling program to its customers.

  We’ve contacted AT&T for comment and will update when we hear back.

  
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by Chris Morran via Consumerist

uCalifornia Labor Commission: Uber Drivers Are Employeesr

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  (Adam Fagen)

  When app-based ride-hailing services make the barrier of entry to the taxi business as low as “yep, I own a car, I try not to hit things with it, and I am not a criminal,” traditional ideas about who is an “employee” have to change. Recent legal decisions in Florida and California have declared drivers for Uber and similar services to be employees, which could be very expensive for these companies if the decision holds up on appeal.

  Disputes over whether a worker is an independent contractor or an employee are a long-running issue in labor law in general. Companies that habitually do this and are sued by employees (or, as the companies would insist, freelancers) are well-known brands like FedEx and Google.

  For drivers for Uber, Lyft, and other similar services, the difference is a significant one. Being an independent contractor, as drivers are defined now, means that drivers are responsible for supplying their cars, maintaining the vehicles, and paying for gasoline.

  If drivers are found to be employees, as the driver in this case was, they would be entitled to have Uber pay their car expenses, as well as other costs that employers are supposed to cover. For all workers, that would include the employer’s portion of Social Security, unemployment insurance, and benefits like health insurance if the employee works enough hours.

  For ride-hailing app drivers, the stakes for Uber are even higher: the driver in the California Labor Commission case only worked for the service for two months, and the company was ordered to pay her $4,000 in expenses.

  Uber drivers are employees, not contractors: California Labor Commission [Reuters]

  
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by Laura Northrup via Consumerist

uAdd Comcast To The List Of Rumored Merger Partners For T-Mobiler

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  (Mike Mozart)

  Not one to sit around and sulk after ditching its $45 billion bid to buy Time Warner Cable – or let a rival cable company beat it to the altar – the Lords of Kabletown are reportedly making eyes with the wireless industry, flirting with the idea of buying T-Mobile.

  Reuters, citing German publication Manager Magazin, reports that Comcast is the new leading suitor to acquire T-Mobile – which just last week was reportedly in talks to merge with Dish.

  Sources say that while T-Mobile’s parent company Deutsche Telekom continues to shop around the wireless provider, it currently views Comcast as the most desirable beau.

  And given the fact that Comcast has $45 billion burning a hole in its pocket that shouldn’t really be a surprise.

  According to rumors that began swirling last week, Dish was looking to borrow $10-$15 billion to finance it possible wedding to T-Mobile.

  Of course, the notion of a wireless-cable merger is nothing new. Shortly before Comcast scrapped its plans to buy Time Warner Cable, the idea was thrust into the universe (a prophecy, perhaps) that the company would seek deals with other media companies, namely Netflix, T-Mobile or Sprint.

  A month later, T-Mobile’s CEO John Legere  made it clear that he’d be up for a coupling, saying during an earnings call that such mergers between cable and wireless companies weren’t far in the future.

  “We think far too simplistically about the four major carriers and what the structure of the industry is going to be,” he explained, “without understanding that the tangential players in various industries are touching mobile players” in a way that’s going to drive new partnerships and acquisitions.

  T-Mobile, which Duetsche Telekom has been trying to marry off for quite some time, isn’t a novice when it comes to media mergers.

  AT&T attempted to acquire T-Mobile in 2011, but that deal fell apart when regulators at the FCC and the Dept. of Justice raised concerns about the impact it would have on competition and rates.

  In the wake of that merger collapse, AT&T had to pay T-Mobile billions in cash and spectrum which the company used to roll out an LTE network that now competes with the much larger market leaders. The company has also led the push toward consumers paying full price for their wireless devices in exchange for lower monthly data plan rates.

  When reached for comment, a rep for Comcast tells Consumerist, “the company doesn’t comment on merger speculation.”

  Additionally, sources familiar with the company are telling us that the cable giant currently appears to have no interest in acquiring T-Mobile.

  Deutsche Telekom talks to Comcast about T-Mobile US sale -Manager Magazin [Reuters]

  
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by Ashlee Kieler via Consumerist