RESPA, HMDA violation fines hit Arkansas' Bank of England

Bank of England in Arkansas and nine former employees have settled with a regulator over their violations of numerous real estate laws impacting over 900 consumers.

The Federal Deposit Insurance Corp. ordered the bank to pay a $1.5 million civil money penalty, and its ex-workers to pay a combined $263,500, it announced Friday. Among numerous infractions, originators in one office misled Department of Veterans Affairs refinance loan applicants to believe they could skip two months of mortgage payments. 

"Veterans and their families who were deceived into refinancing their VA loans were overcharged and did not receive the loan products promised, resulting in significant consumer harm," said Mark Pearce, the FDIC's division of depositor and consumer protection director, in a press release. 

The lender also lured borrowers with low loan prices that were raised prior to closing, according to the FDIC. The bank has made $1.9 million in remediation payments to over 900 consumers. 

A representative for the Bank of England didn't respond to a request for comment Monday. 

The sizable retail lender headquartered southeast of Little Rock offers conventional, government-sponsored, jumbo and home equity loans. It reported 324 registered mortgage loan originators at the end of 2023, according to consumer Nationwide Multistate Licensing System records, and lists 13 branches.

The Bank of England violated the Real Estate Settlement Procedures Act by entering paid co-marketing arrangements and desk rental agreements with real estate brokers, the regulator said. It also had RESPA violations with brokers in an undisclosed number of reverse mortgage transactions. 

In addition, the depository also didn't provide consumers with firm offers of credit in violation of the Fair Credit Reporting Act, and failed to report accurate data on its 2021 loan application in violation of the Home Mortgage Disclosure Act. 

Employees including former branch and sales managers were hit with various fines, with two branch managers paying $110,000 and $100,000 civil money penalties, respectively. 

The lender also agreed to a consent order last August with the FDIC, in which it must implement compliance controls, training guidelines and audit practices and submit quarterly reports to the FDIC. 

Regulators have kept a watchful eye on lenders this year, as the Department of Housing and Urban Development recently penalized over 70 institutions for Federal Housing Administration infractions. The Consumer Financial Protection Bureau also regularly announces enforcement actions and last month scrutinized servicing fees.