On Tuesday, SunTrust Bank agreed to pay $968 million to settle charges stemming from the 2008 financial crisis. U.S. allegations included the mislabeling of large quantities of defective mortgages and abusing borrowers.
“Banks that fail to put the interests of their customers ahead of their of own greed deserve what’s coming to them,” commented Peter Mougey, a partner with the Levin, Papantonio law firm and director of the firm’s Business Torts and Securities Litigation departments.
The settlement will be divided between 49 states and multiple agencies. $500 million will go to relief for customers who suffered from the banks misleading and abusive practices from 2006 through 2012.
In addition to the $500 million, $418 million is apportioned to resolve charges based in the banks claims of originating and underwriting loans that met the standards of the Federal Housing Administration (FHA).
The remaining sum will be used to compensate borrowers and homeowners injured by SunTrust’s practices.
“Regrettably, many banks have consistently demonstrated that when faced with the choice between protecting consumers and lining its pockets, the banks will choose lining its pockets, while leaving consumers to pay the price,” Mougey added.
The bank admitted to poor and abusive practices but admitted to no criminal wrongdoing, as part of the settlement.
Joshua is a writer and researcher with Ring of Fire. You can follow him on Twitter @Joshual33.