PNC Bank 2013 Annual Report Download - page 229

and foreclosure processes, retain an
independent consultant to review certain
residential mortgage foreclosure actions, take
certain remedial actions, and oversee
compliance with the orders and the new plans
and programs. The two orders do not foreclose
the potential for civil money penalties from
either of these regulators, although the range of
potential penalties communicated to PNC by
the regulators in connection with the
agreements described below is not material to
PNC.
In connection with these orders, PNC
established a Compliance Committee of the
Boards of PNC and PNC Bank to monitor and
coordinate PNC’s and PNC Bank’s
implementation of the commitments under the
orders. PNC and PNC Bank are executing
Action Plans designed to meet the requirements
of the orders. Consistent with the orders, PNC
also engaged an independent consultant to
conduct a review of certain residential
foreclosure actions, including those identified
through borrower complaints, and identify
whether any remedial actions for borrowers are
necessary.
In early 2013, PNC and PNC Bank, along with
twelve other residential mortgage servicers,
reached agreements with the OCC and the
Federal Reserve to amend these consent orders.
Pursuant to the amended consent orders, in
order to accelerate the remediation process,
PNC agreed to make a payment of
approximately $70 million for distribution to
potentially affected borrowers in the review
population and to provide approximately $111
million in additional loss mitigation or other
foreclosure prevention relief, which may be
satisfied pursuant to the amended consent
orders by a variety of borrower relief actions or
by additional cash payments or resource
commitments to borrower counseling or
education. Fulfillment of these commitments
will satisfy all of PNC’s and PNC Bank’s
obligations under the consent orders in
connection with the independent foreclosure
review. We do not expect any additional
financial charges related to the amendment to
the consent orders to be material. PNC’s and
PNC Bank’s obligations to comply with the
remaining provisions of the consent orders
remain.
• On February 9, 2012, the Department of
Justice, other federal regulators and 49 state
attorneys general announced agreements with
the five largest mortgage servicers. Written
agreements were filed with the U.S. District
Court for the Southern District of New York in
March 2012. Under these agreements, the
mortgage servicers will make cash payments to
federal and state governments, provide various
forms of financial relief to borrowers, and
implement new mortgage servicing standards.
These governmental authorities are continuing
their review of, and have engaged in
discussions with, other mortgage servicers,
including PNC, that were subject to the
interagency horizontal review, which could
result in the imposition of substantial payments
and other forms of relief (similar to that agreed
to by the five largest servicers) on some or all
of these mortgage servicers, including PNC.
Whether and to what extent any such relief may
be imposed on PNC is not yet known.
• PNC has received subpoenas from the U.S.
Attorney’s Office for the Southern District of
New York. The first two subpoenas concern
National City Bank’s lending practices in
connection with loans insured by the Federal
Housing Administration (FHA) as well as
certain non-FHA-insured loan origination, sale
and securitization practices, and a third seeks
information regarding claims for costs that are
incurred by foreclosure counsel in connection
with the foreclosure of loans insured or
guaranteed by FHA, Fannie Mae or Freddie
Mac. These inquiries are in their early stages
and PNC is cooperating with the investigations.
• The Department of Justice, Civil Rights
Division, and the Consumer Financial
Protection Bureau jointly investigated whether
mortgage loan pricing by National City and
PNC had a disparate impact on protected
classes. In December 2013, PNC settled with
the Department of Justice and the CFPB
covering lending activity by National City
Bank from 2002 to its merger with PNC Bank.
Under a consent order entered by the United
States District Court for the Western District of
Pennsylvania in January 2014, PNC is making
a cash payment of $35 million to be distributed
to National City borrowers to be identified by
these agencies.
• The Department of Justice, Consumer Protection
Bureau, has served a subpoena on PNC seeking
information concerning the return rate for certain
merchant and payment processor customers with
whom PNC has a depository relationship. We believe
that the subpoena is intended to determine whether,
and to what extent, PNC may have facilitated fraud
committed by third-parties against consumers. We
are cooperating with the subpoena.
The PNC Financial Services Group, Inc. – Form 10-K 211