A group of banks, including JPMorgan Chase and Citibank, is being fined $2.3 billion for the manipulation of key interest rates, the European Commission announced last week.
The banks are being accused of manipulating European and Japanese interest rates for years, which affect billions of dollars in contracts globally, from mortgages to credit card bills, according to The Washington Post article “EU Fines Banks $23 Billion for Market Rigging.”
These fines come on the heels of record breaking fines for fraudulent activities leading up to the Great Recession.
For example, JPMorgan Chase has agreed to pay $13 billion to settle federal and state charges related to the sale of residential mortgage-backed securities before to January 1, 2009.
And, Chase also agreed to pay $4 billion for violations of federal and state securities laws for residential mortgage backed securities purchased by Fannie Mae and Freddie Mac.
Then, following a four-week trial, a federal jury decided that Bank of America is liable for fraud on claims related to defective mortgages sold by its Countrywide unit. The U.S. Department of Justice is asking the judge to award up to $848.2 million, the gross loss it said Fannie and Freddie suffered on the loans.
Before these actions finally were taken, big banks also were fined billions for their practices after the housing crash occurred.
For example, 10 banks under enforcement action for faulty mortgage and foreclosure procedures reached an agreement with the Office of the Comptroller of the Currency and the Federal Reserve Board to pay more than $8.5 billion in cash payments and other assistance to help borrowers.
Federal officials said the big banks on the list – Bank of America, Citibank, JPMorgan Chase, U.S. Bank, and Wells Fargo – had significant deficiencies in processing foreclosures including robo-signing of documents, improper fees, wrongful denial of modifications, and failure to help borrowers avoid foreclosure.
With so much fraud being committed by big banks, you’d think American consumers would be flocking in record numbers to credit unions and community banks.
Unfortunately, it isn’t happening.
Five years after troubles in the banking sector helped drive the American economy into recession, a new survey suggests that consumers are starting to feel better about their banks.
Approval ratings for financial institutions are now at 2007 levels — the year before the historic collapse on Wall Street, according to the American Customer Satisfaction Index.
In the survey, reported in the Boston Globe article, “Bank Consumers Dissatisfied But Ratings Are Improving,” consumers gave banks overall a score of 78, higher than utility companies but lower than the automobile industry. Large banks still lag community banks and credit unions by as much as 10 points, according to the survey.
For information on why you should dump your big bank and how you should do it, see the Consumer Reports articles “Bank Accounts: More Fees Coming – How to Fight Back” and “Moving Your Money to a New Checking Account: Steps to Make It Save and Easy.”
I don’t have to worry about how to switch to a credit union. I did it years ago because I was concerned about big banks hiking up my credit card interest rates without notification.