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CFPB Takes Action against Castle & Cooke for Steering Consumers into Costlier Mortgages
Friday, November 8, 2013 6:55 AM

The Consumer Financial Protection Bureau (CFPB) yesterday announced a proposed consent order in its enforcement action against Castle & Cooke Mortgage, LLC, for allegedly steering consumers into costlier mortgages. The CFPB has asked a federal district court to approve a consent order that would provide more than $9 million in restitution for consumers and obtain $4 million in civil money penalties against Castle & Cooke and two of its officers for allegedly paying loan officers’ illegal bonuses.

“Our action has put an end to illegal steering of consumers and has put more than $9 million back in their pockets,” said CFPB Director Richard Cordray. “This outcome embodies our mission—to root out bad practices from the marketplace and ensure consumers are being treated fairly.”

Castle & Cooke is a Utah-based mortgage company that originated about $1.3 billion in loans in 2012. The company maintains 45 branches and does business in 22 states, including Texas. On July 23, 2013, the CFPB filed a complaint in federal district court against the mortgage company and two of its officers for allegedly paying illegal bonuses to loan officers who steered consumers into mortgages with higher interest rates.

To ensure that all impacted consumers are repaid and that consumers are no longer subject to these illegal practices, the defendants have agreed to:

  • End unlawful compensation practices
  • Pay $9,232,896 toward consumer redress
  • Pay a $4 million civil money penalty
  • Ensure that Castle & Cooke retain records of compensation

A copy of the proposed consent order, which will not be final until approved by the court, can be found at: http://files.consumerfinance.gov/f/201311_cfpb_proposed-final-order_castle-cooke.pdf.

A copy of the complaint filed in July can be found at: http://www.consumerfinance.gov/f/201307_cfpb_complaint_Castle-and-Cooke-Complaint.pdf.