Fed will fine PNC Financial, 6 other banks
The Federal Reserve said Monday that it plans to fine eight additional U.S. bank holding companies -- including PNC Financial Services Group Inc. -- for improperly foreclosing on homeowners.
The financial firms -- EverBank, Goldman Sachs Group, HSBC Holdings PLC, PNC Financial of Pittsburgh, MetLife, OneWest Bank, SunTrust Banks and U.S. Bancorp -- were not part of last month's settlement over alleged foreclosure abuses.
Suzanne G. Killian, a senior associate director at the Federal Reserve, called the fines "appropriate" during a congressional hearing in Brooklyn, N.Y.
Killian offered few details about the size of the fines or when they will be levied.
PNC recorded a $240 million expense in the October-December quarter to account for "mortgage foreclosure-related expenses primarily as a result of ongoing governmental matters."
PNC spokesman Fred Solomon said yesterday that the bank could not comment on regulatory matters involving the Federal Reserve.
When asked whether the fine announced yesterday was the reason PNC had taken the $240 million charge, Solomon would say only that the amount was "for foreclosure-related matters."
The nation's five biggest lenders -- Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial -- last month agreed to a $25 billion settlement with state and federal government agencies after a 16-month probe.
As part of that settlement, the five banks agreed to reduce mortgages for about 1 million homeowners. They also will pay into a fund that will send $2,000 to 750,000 homeowners who were improperly foreclosed upon.
Separately, government regulators in April ordered 14 mortgage lenders and servicers to reimburse homeowners who were improperly foreclosed upon. Since then, letters have been sent to 4.3 million borrowers who were at risk of foreclosure during 2009 and 2010.
The deadline for borrowers to seek money under the orders is July 31. So far, nearly 122,000 homeowners have asked for an auditor to review their foreclosures.