Fed Fines Five Large Banks -- WSJ

By Ryan Tracy 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 13, 2018).

WASHINGTON -- The Federal Reserve fined five big banks a total of $35.1 million for issues related to financial-crisis-era mortgage servicing and foreclosures, while also moving them out of the penalty box for what it said was a "substantial improvement" in their practices.

The fines relate to deficiencies that regulators saw in the wake of a meltdown in the U.S. housing market around the 2008-09 financial crisis.

Goldman Sachs Group Inc. was fined $14 million; Morgan Stanley, $8 million; CIT Group Inc., $5.2 million; U.S. Bancorp, $4.4 million, and PNC Financial Services Group Inc., $3.5 million.

The five firms had been slapped with enforcement actions in 2011 and 2012 for what the Fed said were "deficiencies in residential mortgage loan servicing and foreclosure processing."

The Fed said the firms have made "substantial improvement" in their practices.

The central bank didn't provide an explanation for the timing of the penalties. Banks can be subject to enforcement orders for years before they remediate regulators' concerns.

Separately, the Fed penalized Goldman Sachs $90,000 for violations related to the National Flood Insurance Act.

Representatives of U.S. Bancorp, CIT and PNC said they were pleased the matter has been resolved. Morgan Stanley declined to comment. Goldman Sachs didn't reply to a request for comment.

Write to Ryan Tracy at [e-mail]

(END) Dow Jones Newswires

January 13, 2018 02:47 ET (07:47 GMT)

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