Keith Noreika

Highlights: Through the Revolving Door

Noreika Has Made Millions Representing Big Banks Fighting Against Consumer Protections

In the 16 months before he became acting OCC head, Noreika raked in $3.3 million as the lawyer for clients from “Wall Street banks to private equity firms to financial trade associations.” [Robert Schmidt, “Trump OCC Chief Will Stay Away From Big Banks to Avoid Conflicts,” Bloomberg, 06/09/17]

Keith Noreika made a career out of representing big banks when they fought against “consumer-friendly state regulations and class-action lawsuits accusing banks of deceptive practices.” [Cezary Podkul, “Trump’s New Bank Regulator: Lawyer Who Helped Banks Charge More Fees,” ProPublica, 05/15/17]

Noreika’s Wall Street Clients Have Been Fined Over $1.5 Billion Because of CFPB Actions

Noreika’s clients have included Wells Fargo, Goldman Sachs, Bank of America, Deutsche Bank, JP Morgan, and others, which have been fined over $1.5 billion  in penalties and consumers refunds. Noreika reported that he represented the following clients in the year before becoming Acting Comptroller of the Currency (not a complete list): Deutsche Bank, Blackstone, The Carlyle Group, The Charles Schwab Co., Goldman Sachs, IbreriaBank Corporation, KKR, PNC, TD Bank, JP Morgan Securities, Navient, American Bankers Association, Bank of America. [Keith A. Noreika Public Financial Disclosure Report (Form 278e), Office of Government Ethics, 05/05/17; Cezary Podkul, “Trump’s New Bank Regulator: Lawyer Who Helped Banks Charge More Fees,” ProPublica, 05/15/17]

In September 2013, the CFPB, in coordination with the Office of the Comptroller of the Currency (OCC), issued a consent order to JPMorgan Chase for “deceiving millions of customers into buying costly and unneeded services when they signed up for credit cards.” JPMorgan Chase was ordered to refund $309 million to approximately 2.1 million customers “duped into paying for credit monitoring and other add-ons between October 2005 and June 2012.” JPMorgan Chase also agreed to pay $80 million in civil penalties. [Danielle Douglas, “JPMorgan fined $389 million for deceptive credit card practices,” The Washington Post, 09/19/13] 

In 2013, the CFPB worked with the Department of Justice to file a lawsuit against National City Bank for “systematically overcharged black and Hispanic mortgage borrowers.” The bank “agreed to pay $35 million” to settle the charges. [Justine Coyne, “PNC agrees to pay $35M in National City discrimination case”, Baltimore Business Journal, 12/24/13]

In 2014, the CFPB took action against Bank of America and its subsidiary, FIA Card Services, on behalf of approximately 3.3 million consumers “who were duped by the bank’s illegal credit card marketing and billing practices.” “The Consumer Financial Protection Bureau…ordered Bank of America to pay $727 million to customers who were duped by the bank’s illegal credit card marketing and billing practices.” “Separately, the Office of the Comptroller of the Currency is fining the bank $25 million” after the office found that “the bank violated Federal Trade Commission Act provisions that guard against unfair or deceptive tactics or practices.” [Blake Ellis, “Well-known bank chain ordered to pay customers $727 million over credit card practices”, CNN Money, 04/09/14; Korri Kezar, “BofA ordered to repay wrongly charged customers”, Dallas Business Journal, 04/09/14]

In 2015, the CFPB with the Maryland attorney general ordered JPMorgan Chase and Wells Fargo “to pay more than $35 million combined to resolve claims that loan officers at the two banks received kickbacks in exchange for steering mortgage borrowers to a Maryland title company.” The CFPB ordered Wells Fargo to pay $24 million in civil penalties and refund $10.8 million to consumers affected. The CFPB ordered JPMorgan to pay $600,000 in civil penalties and refund $300,000 to consumers affected. [“Wells Fargo, JPMorgan settle mortgage kickbacks probe,” Associated Press, 01/22/15]

In 2015, the CFPB, in association with Attorneys General in 47 states and the District of Columbia, fined Chase Bank amid allegations “that the bank used abusive tactics to collect debts.” The bank engaged in robo-signing activities starting in 2009.  The bank was ordered to “pay $166 million and change credit-card collection practices.” [“Chase to pay $166M over collection tactics,” Knoxville News-Sentinel, 07/09/15]

In August 2016, the CFPB fined Wells Fargo $3.6 million in fines and $410,000 to be returned to affected borrowers for “us[ing] illegal loan servicing practices that resulted in higher costs and fees for some borrowers.” [Ann Carrns, “U.S. Puts Private Student Loan Servicers on Notice: Play Nice”, New York Times, 08/26/16]

On September 8, 2016, the CFPB fined Wells Fargo $185 million for what it called a “‘major breach of trust'” and “‘outrageous'” behavior. Employees opened “as many as 2 million accounts that bank customers never wanted.” Wells Fargo paid a $100 million fine to the CFPB, which was the “largest fine the federal agency has ever imposed.” Wells Fargo also paid “$50 million to the city and county of Los Angeles and $35 million to the OCC.” [James Rufus Koren, “Wells Fargo to pay $185 million settlement for ‘outrageous’ sales culture” , Los Angeles Times, 09/08/16]

Noreika Filed Suit To Protect Banks’ Ability To Charge ATM Fees, Regardless of State and Local Consumer Protections

“A day after voters overwhelmingly banned surcharges on automated teller machines, California banks,” represented by Noreika, “filed suit in federal court […] to block the measure from taking effect.” The “62 percent to 38 percent” vote was in favor of the ban on “$1 and $2 fees that banks charge nonaccount holders who use their ATMs.” The banks, including Wells Fargo and Bank of America, challenged regulations that limited their ability to charge “extra fees to noncustomers who use their ATMs.” Noreika argued that banks should be allowed to charge ATM fees regardless of state and local regulations. [“Banks seek injunction against ATM fee ban,” Arkansas Democrat-Gazette, 11/04/99 and “ATM Fees Nixed in San Francisco,” Orlando Sentinel, 11/04/99]

Noreika Also Fought Against Limits On Predatory Check-Cashing Fees

In the early 2000s, Noreika was a part of “a team of Covington lawyers [who] fought municipal bans on ATM fees, financial privacy restrictions, and limits on check-cashing fees.” On multiple occasions, Noreika, on behalf of banks, argued that the state of California overexerted its rights to regulate banking fees in violation of the National Bank Act. He succeeded in preventing the state from “banning ATM surcharges” and imposing “limits on check-cashing fees.”[ Laura Mandaro, “A Court-Side View on Calif. Preempt Fights,” American Banker, 11/11/03]

Noreika represented Wells Fargo, which was suing the state of California for imposing “limits on check-cashing fees.” In May 2002, “the U.S. District Court for the Eastern District of California decided that the National Bank Act prevents entities other than the Office of the Comptroller of the Currency from exercising… the exclusive authority to regulate and examine” national banks. [Laura Mandaro, “A Court-Side View on Calif. Preempt Fights,” American Banker, 11/11/03]

Under Noreika, the OCC Allowed A Foreign Bank to Evade an Investigation Into Allegations of Breaking Sanctions on Iran and North Korea. The Bank Was One of Noreika’s Former Clients.

Though he “reportedly recused himself from the application approval process,” the OCC, under Noreika’s leadership, approved “an application by the Bank of Tokyo to convert its charter from a New York State license to a federal license.” The move “appears to […] allow the bank […] to evade an ongoing state-level investigation,” in which the bank is accused of letting customers skirt sanctions “on countries like Iran and North Korea.” Noreika “represented Bank of Tokyo’s parent company Mitsubishi UFJ Financial Group before joining the OCC.” In November 2017, “Democratic Senators Elizabeth Warren and Chris Van Hollen sent a letter to the Office of the Comptroller of the Currency […] questioning the regulator’s decision to approve an application by the Bank of Tokyo to convert its charter from a New York State license to a federal license.  ‘We are disturbed by this decision, which appears to (1) allow the bank – which has a long record of compliance problems with the New York Department of Financial Services (DFS) – to evade an ongoing state-level investigation; and (2) run counter to standard OCC policies and procedures for licensing decisions,’ the Massachusetts and Maryland lawmakers said in a letter to acting Comptroller Keith Noreika and incoming Comptroller Joseph Otting. Otting was confirmed by the Senate 54-43 last week, with the support of two Democrats. Warren and Van Hollen, who sit on the Senate banking panel, also said it is ‘especially troubling’ that the decision to approve the charter conversion was done while the OCC was under the leadership of Noreika, who represented Bank of Tokyo’s parent company Mitsubishi UFJ Financial Group before joining the OCC. Noreika reportedly recused himself from the application approval process, but the lawmakers still found the process troubling […]The lawmakers also accused the Bank of Tokyo of trying to ‘sidestep a New York investigation’ into whether it was allowing customers to avoid sanctions on countries like Iran and North Korea.” [Ian McKendry, “Warren, Van Hollen probe Bank of Tokyo’s switch to national bank,” American Banker, 11/20/17]

Noreika Wants to Make it Easier for Wells Fargo Employees Involved in Abusive Sales Practices to Get a Golden Parachute.

Noreika “wants to make it easier for Wells Fargo to pay employees when they leave, loosening a restriction in place” on “‘golden parachute'” payments “to employees who played a role in a bank’s problems.” Keith Noreika “wants to make it easier for Wells Fargo to pay employees when they leave, loosening a restriction in place since a phony accounts scandal hit the bank last year, according to people familiar with the matter. The initiative comes as President Donald Trump is trying to lighten rules on Wall Street and the bank regulator, Keith Noreika, acting Comptroller of the Currency (OCC), must weigh whether to vet new Wells Fargo executives. If Noreika’s approach prevails, the OCC could go easier on Wells Fargo and any other large banks sanctioned in the future.” While at OCC, Noreika “advocated easing up on sanctions imposed on Wells Fargo in the wake of the scandal over abusive sales practices, according to current and former officials.” [Patrick Rucker, “US regulator wants to loosen leash on Wells Fargo: sources,” Reuters, 10/30/17]

Noreika Defended Wells Fargo in a Class-Action Lawsuit For “Debit Card Reordering” to “Maximize Overdraft Fees”

Noreika was an attorney for Wells Fargo in Gutierrez v. Wells Fargo, “a federal class-action case in California” in which the bank was charged with “debit card reordering, or altering the sequence of debit card withdrawals to maximize overdraft fees. So if a cardholder with $100 in their account made successive withdrawals of $20, $30, and $110 over the course of a day, instead of getting hit with one $35 overdraft fee, Wells Fargo would reorder the transactions from high to low, thus earning three fees.” [David Dyen, “MORE TRUMP POPULISM: HIRING A BANK LAWYER TO ATTACK CFPB BANK RULES,” The Intercept, 07/20/17]

Noreika Wasted No Time Cashing in on His Government Experience and Went Straight Through the Revolving Door to His Old Law Firm After Leaving Comptroller of the Currency

In January 2018, Noreika “returned to his old law firm, where he will advise banks he oversaw during an eventful six-month stint as acting Comptroller of the Currency.” This is due to the fact that he “wasn’t subject to the same post-employment ethics restrictions as permanent employees because of his status as something of a seat-filler” pending Joseph Otting’s confirmation. He has said “he would voluntarily submit to a one-year cooling off period during which he won’t be able to do any business with the OCC.” [Ryan Tracy and Liz Hoffman, “Former Trump Bank Regulator Returns to Law Firm,” The Wall Street Journal, 01/