Illinois Attorney General Lisa Madigan, along with U.S. Attorney General Eric Holder and other state Attorneys General, announced the $25 billion settlement of an investigation into widespread robosigning practices within the nation’s five largest mortgage servicers: Bank of America, JPMorgan Chase, Wells Fargo, Citibank, and Ally Bank. Illinois will receive more than $1 billion to write down principal, help underwater homeowners (those who owe more than their homes are currently worth) refinance,  compensate homeowners who were harmed by robosigning, and address the causes and impacts of the robosigning and foreclosure crisis.

The Pew Charitable Trusts published a model one-page disclosure form for bank and credit union account fees in April of 2011 as part of a paper entitled Hidden Risks: The Case for Safe and Transparent Checking Accounts. According to a Pew-commissioned poll of U.S. checking accountholders conducted in July 2011, 78 percent of all American checking accountholders responded positively to a proposal that would require banks to provide a one-page summary of information about checking accounts’ terms, conditions and fees, while only four percent said this would be a negative change. Clearly explaining checking account fees is important because it allows consumers to effectively comparison shop to find a bank that works best for them. It can also help lower barriers to entry for un- and underbanked consumers, who, according to the FDIC, cite hidden charges as one of the top reasons they do not participate in the banking system.

The Federal Reserve Board approved Capital One’s acquisition of the online savings bank ING Direct,  the first major bank merger since the passage of the Dodd-Frank Consumer Protection and Wall Street Reform Act.

New data on the Home Affordable Modification Program (HAMP) show that its program designed to incentivize principal reductions on underwater loans, the Principal Reduction Alternative (PRA), continues to reach a small fraction of homeowners. Recent changes to the program, as well as the $25 billion robosigning settlement, will likely boost the number of homeowners receiving principal writedowns, but the Government Supported Entities (Fannie Mae and Freddie Mac)’s regulator, the Federal Housing Finance Administration (FHFA), continues to reject calls to allow reductions of principal on its loans. This means that a large number of underwater homeowners will be ineligible for relief, given the GSEs’ substantial market share—as of the third quarter of 2011, the GSEs backed 71 percent of newly originated loans.