NMP - October 2016 - 58

✒ Wells Fargo Hit by Largest CFPB Fine for Privacy Breaches: What It Means for You! By Andrew Liput I OCTOBER 2016 n National Mortgage Professional Magazine n NationalMortgageProfessional.com 58 n mid-September, Wells Fargo reached a $185 million settlement for what the Consumer Financial Protection Bureau (CFPB) and other federal officials called a widespread practice among employees of creating fake customer accounts, PIN numbers and e-mails in order to meet sales targets and earn bonuses. Details reveal that Wells Fargo employees may have opened as many as 1.5 million bank accounts and another half million credit card accounts not authorized by consumers. The penalty resulted after the CFPB became aware of the details from the bank's own investigation that reviewed accounts between 2011 and 2015. Further details revealed publicly indicate that Wells Fargo employees issued debit cards with fake PINs and used phony e-mail addresses to secretly sign up customers for online banking. They then temporarily transferred customers' money to the bogus bank accounts, sometimes leaving a low balance and triggering overdraft or other charges. Many customers also were charged annual fees and interest on the credit cards. Although more than 5000 Wells Fargo employees were terminated because of their roles in this widespread scheme, and the bank acted on its own initiative in rooting out and ending the practice, the news has added to consumer fears about how their non-public personal information is being handled by bankers generally. The Wells Fargo incident raises some key issues that are worth considering by all banks and mortgage lenders: l Enforcing corporate policies in locally managed branch offices is a daunting task that requires constant supervision and accountability. l Determining who may access consumer private data and for what purpose requires careful consideration and technological checks and balances. l Creating an environment where non-licensed and regulated employees can benefit financially by "upselling" financial products to unsophisticated consumers is dangerous. l Tying manager income or bonuses to branch financial goals could create an untenable conflict of interest that may result in consumer harm. l Viewing consumers as vehicles for advancement and financial reward rather than as individuals, neighbors, and members of your community violates the George Bailey- Bailey Savings & Loan Golden Rule: Bankers are to help lift people up, not use people to lift themselves up! Wells Fargo did the right thing by conducting an internal investigation and holding wrongdoers accountable for consumer privacy violations and unauthorized banking transactions. The CFPB has planted a stake in the ground on privacy rights that every lender of any size will do well to heed. Andrew Liput is CEO of Secure Insight, a risk analytics firm offering vendor management services addressing settlement agent risk. He can be reached by e-mail at ALiput@SecureSettlements.com. SPONSORED EDITORIAL heard on the street l Auction.com has announced the hiring of Patrick McClain as senior vice president of Auction Portfolio Operations, where he will lead Auction.com's portfolio management team toward establishing a "One Stop Shop" experience for sellers from onboarding to closing, regardless of disposition type. l George Mason Mortgage, a subsidiary of Cardinal Bank, has announced that Dick Koch has joined its team as managing director of strategic growth and acquisition. l Castle & Cooke Mortgage LLC has announced the addition of a new branch in Henderson, Nev., the company's second in the state and its the eighth new branch this year. Michael Cornachio will serve as branch manager at the new Henderson office. He attributes his return to Castle & Cooke Mortgage to a number of factors, including its leadership, people, products, speed and ability to adapt to market conditions. l Gateway Mortgage Group has announced the hiring of Pete Tamoney as a new regional sales manager. Pete will serve the existing and prospective clients in the Mid-Atlantic and Eastern Midwest regions. l Resitrader Inc. has named Doug Mayers as its new national sales executive. Mayers has a broad range of experience in the secondary mortgage market, including positions in correspondent sales and sales management; whole loan and distressed asset pricing, trading and acquisitions; and loan acquisition platform development. l Capsilon Corporation has announced that Jim Obsitnik has joined the company as chief operating officer. Based in Capsilon's San Francisco headquarters, Obsitnik will be responsible for Capsilon's business operations including sales, marketing, product operations, support and services. l Guild Mortgage Company has selected Wendy Wong as its first senior vice president and chief marketing officer to support its national growth plan. l GSF Mortgage has announced the additions of Jessica and Brian Friis in DeWitt, Iowa, joining the company with a combined 14 years of mortgage industry experience. GSF Mortgage has also added Carl LeMaster as a mortgage loan originator, located in Ford City, Penn., joining the company with four years of experience in the continued from page 48 l l l l l mortgage industry. GSF has also named Carla Lewis as a mortgage loan originator in Farnham, Va., joining GSF with three years of mortgage and real estate experience, and 15 years of experience as a small business entrepreneur. Open Mortgage has named Kevin McKnight as vice president of sales, where he will work to drive growth and profitability in the Open Mortgage core business of traditional mortgages. WFG National Title Insurance Company has added Kristi Kaufman Davison to its Agency Underwriting Team in Massachusetts and the New England states, where she will be responsible for supporting WFG title agents throughout New England on underwriting issues and serve as a resource for them as well. National Mortgage Insurance Corporation (National MI), a subsidiary of NMI Holdings Inc., has announced that Claudia Merkle has been named chief operating officer of the company. In her new role as COO, Merkle will continue to lead underwriting, operations, servicing, sales, marketing, and business development. New American Funding has announced the appointment of Frank Fuentes as national vice president of Multicultural Lending. Fuentes will help lead the company's Latino Focus Committee, to help improve lending experiences for Hispanic consumers, and will work on a national level to expand the company's footprint and multicultural initiatives, while increasing homeownership in diverse markets. LRES has announced the addition of Mike Bye as vice president of Sales, where he will be responsible for reporting on all sales activities and establishing and managing client relationships. Your turn National Mortgage Professional Magazine invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that seem appropriate and/or other pertinent data to the attention of: Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail: newsroom@nmpmediacorp.com Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue. http://www.Auction.com http://www.NationalMortgageProfessional.com

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