CFPB Accuses Castle & Cook of Paying 500 Quarterly Bonuses Tied to Loan Terms By Paul Muolo pmuolo@imfpubs The Consumer Financial Protection Bureau late Tuesday filed a civil suit against Castle & Cooke Mortgage and its two top executives, accusing the Utah-based nonbank of illegally giving bonuses to loan officers who steered consumers into mortgages with higher interest rates. Overall, the firm paid 500 quarterly bonuses – roughly $4 million in compensation – to its retail loan officers, based on a compensation structure that rewarded them for bringing in mortgages at higher note rates, the government charges. The agency, in a statement, said it is seeking “an end to this unlawful practice, restitution for those consumers who were upcharged, and civil money penalties.” In its suit, filed in U.S. District Court for the Central District of Utah, the young agency charges that Castle & Cooke, through actions taken by its president, Matthew Pineda, and senior vice president of capital markets, Buck Hawkins, violated the Federal Reserve’s Loan Originator Compensation Rule which became law in April 2011. The lawsuit was filed on the CFPB’s behalf by the Department of Justice. The regulation has a mandatory compliance date of April 6, 2011. That rule banned compensation based on loan terms such as the interest rate of a mortgage. The bonuses in question were paid to the LOs from July 8, 2011, to April 27, 2012. According to a statement from Castle & Cook, the company has been cooperating with the CFPB in its investigation and anticipates “an amicable resolution in this complex regulatory matter.”
Posted on: Sat, 27 Jul 2013 07:51:28 +0000
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