Cranston’s Domestic Bank to Pay Fines of $1.8 Million

The mortgage meltdown and subsequent housing price abyss are the result of many players, both large and small. Looks like Domestic Bank had some problems with “unsafe and unsound banking practices,” particularly related to false advertising in the mortgage sector. From Channel 10:

CRANSTON, R.I. — Rhode Island-based Domestic Bank has been ordered to pay $1.8 million for engaging in unsafe and unsound banking and mortgage lending services.

According to the U.S. Treasury Department’s Office of Thrift Supervision, Domestic Bank’s mortgage arm falsely advertised mortgage rates and had “sham employees” on the books.

A Domestic Bank executive did not deny the accusations, but he wouldn’t go into specifics about what happened. He said the accusations stemmed from third-party relationships and administrative procedures in place between 2003 and early 2007.

Hat tip to Ward2.org blogger Mark Lucas who appears to be back in the saddle again in the blogosphere.

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11 responses

  1. Ghost of Christmas Future

    Domestic Bank is a closely held company owned by the Baker family.The spokesman was Craig Baker. Any wonder why he gave no specifics about what happened?

  2. That they agreed to $1.8 implies two things:

    1) the evidence must have been pretty much overwhelming,

    and

    2)the AG must have been able to threaten much bigger penalties if they didn’t take the plea.

  3. This just proves what we in the Forest Hills neighborhood have always felt about them.

  4. I wonder if the people who were hurt by the ‘unsafe and unsound’ practices will see any of the money.

  5. Ghost of Christmas Future

    It was reported by WPRI that part of the settlement with the OTS was a $5 million remediation plan

  6. Ghost of Christmas Future

    See attached link. It’s the C & D as issued by the OTS. Although long, it’s interesting.

    http://www.ots.treas.gov/enforcement/docs/r.cfm?96385.pdf

  7. A search of the OTS site shows this isn’t the first time they were caught by the feds.

    I’ve updated ward2.org with links to a similar violation in 2005 as well as the details of the fines that were levied.

  8. Suzanne Arena

    Tom Cloonen, you could have an inside job at Domestic. The company MUST HIRE a full-time Compliance Officer resposible for reviewing the institutions consumer-banking practices….or do you suppose Councilman Lanni et al. will be lining up to keep the lid of the rest of the dirty deals!

  9. Ghost of Christmas Future

    More on the issue. Nat Baker, the owner steps down. They want to put this behind them. No mention of the previous two C & D’s ordered by the OTS in the past several years. Like Andre said, ownership of this bank substaniated what the neighbors of Forest Hills already knew. See link.

    http://www.projo.com/business/content/BZ_DOMESTIC_BANK_FINE_15_07-15-08_ABARTCE_v21.31a1910.html

  10. Couldn’t do it Suzanne. I wouldn’t want to work at a place that made me feel dirty. And as far as Lanni et al, we told them for years Domestic Bank lacked corporate governance. We told Lanni et al that Domestic Bank was a horrible neighbor that didn’t care how they adversely affected the neighborhood. Those council members thought they knew better. I for one will remember how we were dismissed by Lanni et al when I enter the ballot box this fall. What was your inspiring quote Councilman Lanni? “This proposed ordinance is anti-business. It’s like killing a fly with a sludge hammerâ€?. I also hope those in Santamaria’s ward remember how he threw us under the bus because of political pressure or was it the three amigo’s boots on Councilman Santamaria’s neck that made him jump ship.

    Caveat emptor

  11. Oskar DeGrauche

    Domestic will not survive this – they are a hot target for a small, local acquisition.

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