The Office of the Comptroller of the Currency (OCC) has taken action against the Laredo National Bank, Laredo, Texas, and its subsidiary, Homeowners Loan Corporation (HLC), for improper lending practices.
An agreement reached with the OCC requires HLC to strengthen its policies and control systems to ensure compliance with consumer protection laws, regulations and OCC guidance, including the Federal Trade Commission Act.
It also requires HLC to reimburse borrowers who were harmed by improper practices.
Laredo, the fifth-largest bank in Texas, has since been acquired by Banco Bilbao Vizcaya Argentaria S.A. (BBVA). The bank's new owners said they shared the OCC's concerns and the directors of both the bank and HLC voluntarily entered into the agreement to ensure that appropriate changes are made and the affected borrowers are fully compensated.
The bank has agreed to set aside at least $14 million to fund reimbursement payments to borrowers. The total amount of reimbursement paid out will depend upon the number of borrowers found to have been harmed and will be subject to final review by the OCC.
BBVA, the second largest bank in Spain, spent $850 million on Laredo and also has purchased Valley Bank in Southern California for $17 million. It's part of a strategy to pursue Hispanic business in Texas and California.
