The term robo-signing got coined just five or six years ago. It is not a phrase that has positive connotations about the value of leveraging advanced technology. No, robo-signing is that practice by lenders that has come to be associated with abuses that contributed to the recent mortgage crisis and the Great Recession.
A wise man once said, “Those who do not learn history are doomed to repeat it.” And so it is that you might think that banks and other lending institutions would have learned from the experience of a few years ago that risks of robo-signing may be harmful not only to the economy generally, but also to an individual business. But recent news suggests that may not be the case.
It was just at the end of last month that word came that Bank of America agreed to settle allegations that it had failed to properly handle the legal process when looking to pursue collections of outstanding credit card and other consumer loans. As a result of the case, the bank has been hit with a $30 million civil penalty. It also is under orders to offer remediation to some 73,000 military customers and to improve its compliance practices.
Specifically, the Office of the Comptroller of the Currency cited Bank of America for submitting signed affidavits indicating particular cases had been reviewed. In many cases no reviews had been conducted. In some cases, the bank filed documents that hadn’t gone through proper notary procedures.
In regard to the 73,000 military customers, regulators said the bank violated protections that are guaranteed by the Servicemembers Civil Relief Act.
A statement from the bank says the penalties stem from issues that were discovered four years ago and it says initiatives are underway to ensure proper compliance going forward.
What this reflects is that businesses, large or small, can run into difficulties with collections when compliance with state and federal laws is overlooked for some reason. Working with an experienced attorney is the right way to remedy that.