Freshfields acts for Deutsche mortgage arm on £840,000 FSA fine
Freshfields Bruckhaus Deringer has advised Deutsche Bank's mortgage division on its £840,000 fine from the Financial Services Authority (FSA). City partner Andrew Hart - who has co-led the magic circle firm's financial institutions group since November last year - advised DB Mortgages, which has agreed to pay the £840,000 penalty for irresponsible lending practices and unfair treatment of customers in arrears.
February 25, 2011 at 10:40 AM
2 minute read
Freshfields Bruckhaus Deringer has advised Deutsche Bank's mortgage division on its £840,000 fine from the Financial Services Authority (FSA).
City partner Andrew Hart (pictured) – who has co-led the magic circle firm's financial institutions group since November last year – advised DB Mortgages, which has agreed to pay the £840,000 penalty for irresponsible lending practices and unfair treatment of customers in arrears.
The bank has also agreed to pay back around £1.5m to customers that were unfairly treated.
The £840,000 fine was discounted by 30% from £1.2m after the FSA took into account DB Mortgages' efforts to improve its arrears handling procedures, and that it had worked in an open and co-operative way with the FSA.
Margaret Cole, the FSA's managing director of enforcement and financial crime, said: "Firms need to understand that we will not tolerate lax lending practices and unfair treatment of customers in arrears. Firms which fail in their obligations to customers should expect not only a substantial fine but also that they will have to pay back customers who have been disadvantaged by their failings."
However, one City finance partner said: "Deutsche Bank is one of the world's largest banks and probably spends this amount of money on phone calls every minute. I can't comment on what it did or did not do, but this fine is merely a slap on the wrist."
DB Mortgages said in a statement: "Following the identification of the issues raised by the FSA in an industry-wide review started in 2008, DS mortgages immediately commissioned a third-party review into its lending and arrears collection processes. As a consequence, DB mortgages has improved its oversight of mortgage servicing activities."
The division was wound down in mid-2008 and no longer originates mortgages. Freshfields is a longstanding adviser to Deutsche Bank on regulatory issues.
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