This frequently asked question is becoming a common question asked of me. The answer can be a bit complicated and it partially depends upon whether the bank is state or federally chartered. However there are four ways in which banks are accountable to its customers or regulatory bodies.
The little known Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises all national banks. They DO have the power to take action against a bank that does not comply with regulations or that otherwise engages in unsound business practices. The OCC does not regulate all banks.
Every state also has a department of banking. This department has a complaint procedure that you can easily follow to communicate your dissatisfaction with your lender. Very few people take this step, but it can be helpful for you. The departments have broad power.
There are also state and federal laws regarding various legal causes of actions, which include, but are not limited to, "lender liability" actions and other contractual and tortuous causes of actions.
Finally, I have found it useful to utilize the Uniform Commercial Code (UCC) in dealing with banks on distressed real estate. There are many aspects to this, but a general, broad application is that under the UCC, banks (and all businesses) must exercise reasonable care and fair dealing with you. Alleging a violation of the UCC and backing the allegation with facts, is a sound way to get the desired result in distressed real estate.
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