AIG's Wilmington settles with OTS

One of AIG's subprime units settled with the Office of Thrift Supervision over inappropriate loans to some borrowers and excessive fees.
JUN 08, 2007
One of AIG's subprime units settled with the Office of Thrift Supervision over inappropriate loans to some borrowers and excessive fees. Wilmington Finance Inc., a Plymouth, Pa.-based subsidiary of American International Group Inc., provided extensive loan-origination services for AIG Federal Savings Bank from July 2003 to May 2006. The bank, however, failed to manage and control its activities in a safe and sound manner and didn't consider consumer-protection issues appropriately, the OTS said. Wilmington originated subprime home loans that were inappropriate for some borrowers, and the firm didn't properly consider their ability to repay the debt, the government agency said. As part of the agreement with OTS, three of its subsidiaries—AIG Federal Savings Bank, American General Finance Inc. and Wilmington Finance Inc.—will implement program to provide affordable loans to certain borrowers facing a high risk of foreclosure. Additionally, AIG said that it will donate a total of $15 million, over a three-year period, to certain not-for-profit organizations to support their efforts to promote financial literacy and credit counseling. AIG said it set aside $128 million to pay for the program, but needs to set aside an additional $50 million reserve to pay for the program and the $15 million donation.

Latest News

SEC to lose Hester Peirce, deepening a commissioner crisis
SEC to lose Hester Peirce, deepening a commissioner crisis

The "Crypto Mom" departure would leave the SEC commission with just two members and no Democratic commissioners on the panel.

Florida B-D, RIA owner pitches bold long-term plan to sell to advisors
Florida B-D, RIA owner pitches bold long-term plan to sell to advisors

IFP Securities’ owner, Bill Hamm, has a long-term plan for the firm and its 279 financial advisors.

Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships
Fintech bytes: Vanilla, Wealth.com forge new estate planning partnerships

Meanwhile, a Osaic and Envestnet ink a new adaptive wealthtech partnership to better support the firm's 10,000-plus advisors, and RIA-focused VastAdvisor unveils native integrations with leading CRMs.

Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions
Fiduciary failure: Ex-advisor who sold practice fined after clients lost millions

A former Alabama investment advisor and ex-Kestra rep has been permanently barred and penalized after clients he promised to protect got caught in a $2.6 million fraud.

Why the evolution of ETFs is changing the due diligence equation
Why the evolution of ETFs is changing the due diligence equation

As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.

SPONSORED Are hedge funds the missing ingredient?

Wellington explores how multi strategy hedge funds may enhance diversification

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management