Financial Regulation

A Baltimore man who is a longtime veteran of the financial services industry has been appointed as the state's next commissioner of financial regulation, replacing the soon-to-retire Mary Louise Preis. The new commissioner, Charles W. Turnbaugh, 58, is a first vice president and counsel with MBNA America NA. "He has senior-level experience and knowledge of the [financial services] industry, its operations and the operation of financial institutions, as well as a strong working knowledge of the policy issues facing financial institutions," said James D. Fielder Jr., secretary of the Maryland Department of Labor, Licensing and Regulation, the agency within which the commissioner of financial regulation works.

Marylanders received more than $1.3 billion in relief from the National Mortgage Settlement during a 12-month period, Attorney General Douglas F. Gansler announced Tuesday. That assistance went to nearly 17,000 mortgage borrowers between March 1, 2012 and March 31, 2013, Gansler said. The total amount allocated so far is $400 million more than the original estimate of the settlement's total financial relief. Plus, the relief amount announced Tuesday does not include one-time cash payments that will soon be made to borrowers who lost their homes to foreclosure in the period from 2008 through 2011 and whose mortgages were serviced by one of the five settling banks, Gansler said.

Corporate-sponsored groups have launched a campaign of litigation in the lower federal courts challenging the legality of the second major piece of President Barack Obama's legislative program, one that received a lot of attention in last week's first presidential debate: the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. When these cases reach the Supreme Court, we could very well see a reprise of the drama surrounding its decision on the Affordable Care Act at the end of this past term.

The Federal Reserve Board announced Thursday that it terminated an enforcement action against Baltimore-based Harbor Bankshares Corp. The Federal Reserve Bank of Richmond issued the action in July 2010, reaching an agreement with the holding company to take steps to shore up its finances. The company, parent of The Harbor Bank of Maryland, agreed to comply with consent orders from other regulators as well as not to pay dividends, take on more debt or redeem shares without the approval of the Federal Reserve Bank first.

Ocwen Loan Servicing gives penalty fee refunds Ocwen Loan Servicing has refunded nearly $675,000 to borrowers in Maryland after charging them prepayment penalties that violated state law, Maryland's Office of the Commissioner of Financial Regulation said Wednesday. After the financial regulation office found some violations, Ocwen checked all its Maryland mortgages and sent refund checks to more than 180 borrowers at the end of last month, the state said. - Jamie Smith Hopkins Senior housing complex in Middle River almost done The first phase of the 196-home, $43 million Renaissance Square development in Middle River is nearing completion, with a senior housing apartment building expected to open to residents in December, developer Enterprise Homes said Wednesday.

State regulators said Wednesday that they have ordered a large mortgage broker to stop making loans to Marylanders after federal investigators alleged the company had violated lending rules. The U.S. Department of Housing and Urban Development announced last week that it was no longer allowing Allied Home Mortgage Corp. to originate loans insured by the Federal Housing Administration because it said the company had played "fast and loose with FHA's standards. " The Justice Department is alleging mortgage fraud in a lawsuit against Allied.

The Federal Reserve Board announced Thursday that it terminated an enforcement action against Baltimore-based Harbor Bankshares Corp. The Federal Reserve Bank of Richmond issued the action in July 2010, reaching an agreement with the holding company to take steps to shore up its finances. The company, parent of The Harbor Bank of Maryland, agreed to comply with consent orders from other regulators as well as not to pay dividends, take on more debt or redeem shares without the approval of the Federal Reserve Bank first.

An effort to allow for-profit companies to provide debt management services to Marylanders failed during the last hours of the General Assembly when the legislature passed a bill to increase consumer protections for those seeking help from credit counselors. Now, only nonprofits can provide credit counseling and debt management in Maryland. But state regulators are expected to study whether for-profits can do the same job, and the issue may come up again next year. Two years ago, scandals erupted in the credit counseling industry with some nonprofits accused of overcharging consumers and channeling money to for-profit affiliates.

For many people, spreading holiday cheer includes making donations to charity. But county consumer protection officials are warning residents to be wary of telephone and e-mail solicitations, particularly during a holiday season riddled with economic woes. "Certainly the holiday season brings out people who want to take advantage of people's generosity," said Rebecca Bowman, Office of Consumer Affairs administrator. "And I think in hard economic times, it's not uncommon to see solicitations aimed at people who may be in trouble."

Maryland financial regulators will take part in the effort to make sure the big banks that recently settled allegations of widespread foreclosure misconduct live up to the agreement they signed. Anne Balcer Norton, deputy commissioner of financial regulation at the state Department of Labor, Licensing and Regulation, said the agency has been named to the monitoring committee for the nationwide settlement. It's the only state bank regulator on the committee, she said. "I'm pleased that we get a seat at the table," she said, adding that the agency has the "ground-level perspective" of what homeowners are going through.

Corporate-sponsored groups have launched a campaign of litigation in the lower federal courts challenging the legality of the second major piece of President Barack Obama's legislative program, one that received a lot of attention in last week's first presidential debate: the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. When these cases reach the Supreme Court, we could very well see a reprise of the drama surrounding its decision on the Affordable Care Act at the end of this past term.

Maryland financial regulators will take part in the effort to make sure the big banks that recently settled allegations of widespread foreclosure misconduct live up to the agreement they signed. Anne Balcer Norton, deputy commissioner of financial regulation at the state Department of Labor, Licensing and Regulation, said the agency has been named to the monitoring committee for the nationwide settlement. It's the only state bank regulator on the committee, she said. "I'm pleased that we get a seat at the table," she said, adding that the agency has the "ground-level perspective" of what homeowners are going through.

State regulators said Wednesday that they have ordered a large mortgage broker to stop making loans to Marylanders after federal investigators alleged the company had violated lending rules. The U.S. Department of Housing and Urban Development announced last week that it was no longer allowing Allied Home Mortgage Corp. to originate loans insured by the Federal Housing Administration because it said the company had played "fast and loose with FHA's standards. " The Justice Department is alleging mortgage fraud in a lawsuit against Allied.

Maryland's financial regulators have been busy for several years now, sorting through the fallout from the financial crisis and the real estate collapse. The Office of the Commissioner of Financial Regulation oversees state-chartered banks and is responsible for ensuring that other financial companies — such as mortgage lenders, brokers and debt-collection agencies — operate properly in the state. Most recently, the office has been pursuing unlicensed debt collectors and ramping up efforts to make sure that licensed collectors have enough documentation when trying to win court judgments.

Federal banking regulators have ordered an Eastern Shore bank to take measures to establish adequate capital levels, which could include finding a buyer, merging with another institution or selling shares, among other options. The Bank of the Eastern Shore has 60 days to comply with the prompt correction action issued this week by the Federal Reserve Board, which found the institution undercapitalized at the end of April. The order said that the Cambridge-based bank reported a net loss of almost $3.2 million at the end of June from December 2010 and that its equity capital declined to $7.7 million from $10.9 million.

Maryland's Department of Labor, Licensing and Regulation has hired a former Baltimore prosecutor to oversee the enforcement of financial regulations, the state said Wednesday. Cynthia H. Jones, the new assistant commissioner of enforcement and consumer services, will also direct staff who handle consumer questions and complaints within the department's financial regulation office. She worked for the Baltimore state's attorney's office for 15 years. She was deputy state's attorney for the past five years, with duties that included managing investigations.

Once again, Maryland legislators may allow for-profit companies to offer debt management services to consumers here. Once again, it's a bad idea - at least until we know more. And it couldn't come at a worse time, with a growing number of Marylanders financially struggling and foreclosures setting a record. They certainly don't need a credit counselor trying to sell them other products, as consumer advocates fear would be the result. Debt management is when a credit-counseling agency negotiates with creditors on a consumer's behalf to come up with a repayment plan.

Three Maryland mortgage companies must refund about $246,000 in prepayment penalties charged to customers statewide in violation of a 2008 law, according to state financial regulators. Litton Loan Servicing and Saxon Mortgage Services have returned $71,000 collected from 160 Maryland consumers, and Bayview Loan Servicing refunded $104,000 to 40 Marylanders, according to the state Department of Labor, Licensing and Regulation. The violations were discovered during compliance examinations conducted by the Office of the Commissioner of Financial Regulation.

Maryland's top financial regulator is joining the board of the Federal Reserve. Sarah Bloom Raskin was confirmed as a Fed governor late Wednesday by the U.S. Senate, a move that was expected. Janet Yellen, president of the Federal Reserve Bank of San Francisco, was given the go-ahead to join the board of governors as vice chair. Raskin, the state's commissioner of financial regulation for the past three years, is resigning from that job effective Friday. Her deputy, Mark Kaufman, has been nominated for the commissioner position, a job that requires approval by the state Senate.

Three Maryland mortgage companies must refund about $246,000 in prepayment penalties charged to customers statewide in violation of a 2008 law, according to state financial regulators. Litton Loan Servicing and Saxon Mortgage Services have returned $71,000 collected from 160 Maryland consumers, and Bayview Loan Servicing refunded $104,000 to 40 Marylanders, according to the state Department of Labor, Licensing and Regulation. The violations were discovered during compliance examinations conducted by the Office of the Commissioner of Financial Regulation.