The CFPB has announced a proposed consent order in its action against Castle & Cooke for allegedly steering consumers into more expensive mortgages.
The Bureau took aim at Utah-based Castle & Cooke in July this year, filing a complaint in federal district court that alleged the company handed out bonuses to loan officers who steered borrowers into mortgages with higher interest rates. The CFPB has now announced it has asked a federal district court to approve a consent order that would see Castle & Cooke pay more than $9m in restitution and$4m in civil penalties.
“Our action has put an end to illegal steering of consumers and has put more than $9 million back in their pockets. This outcome embodies our mission—to root out bad practices from the marketplace and ensure consumers are being treated fairly,” CFPB Director Richard Cordray said.
The CFPB alleged that Castle & Cooke, through actions taken by president, Matthew A. Pineda, and senior vice-president of capital markets, Buck L. Hawkins, had violated the Loan Originator Compensation Rule by paying out quarterly bonuses based upon the interest rates of loans offered to borrowers by the company's loan officers. The Bureau alleged that more than 1,100 quarterly bonuses were paid to more than 215 of the company's loan officers.