March 27, 2024

Department of Labor holds PrimeLending vice president, managers liable after employees fired for reporting consumer fraud concerns

Investigation finds branch manager pressured to pass on improper fees to applicants

SAN FRANCISCO ‒ The U.S. Department of Labor has ordered a former senior vice president and two managers employed by PrimeLending to pay $35,000 in emotional damages and the legal fees of two California employees who the company fired illegally after they reported a branch manager pressured them to pass on fees to loan applicants caused by the company's internal processing delays.

Investigators with the department's Occupational Safety and Health Administration found the nationwide lender violated whistleblower provisions in the Consumer Financial Protection Act by terminating the employees who raised their concerns with a regional manager and senior vice president of Human Resources.

"Employees who report potential consumer fraud are protected by federal law against retaliation of any kind. Under the Consumer Financial Protection Act's whistleblower provisions, managers can be fined personally for retaliation," explained OSHA Regional Administrator James D. Wulff in San Francisco. "In this case, OSHA fined three PrimeLending managers for trying to prevent workers' concerns from coming to light. The U.S. Department of Labor will not tolerate retaliatory actions against workers exercising their rights and those responsible for such actions will be held accountable."

In addition to payment of personal damages, OSHA ordered PrimeLending to pay an undisclosed amount in lost back wages and interest to the employees. The company must also expunge the employment records of both employees, post an anti-retaliation notice at all its branches and train its employees about their rights under the Consumer Financial Protection Act.

The company and the managers sanctioned may appeal OSHA's order to the department's Office of Administrative Law Judges.

PrimeLending is a Dallas-based national mortgage lender and wholly owned subsidiary of PlainsCapital Bank, also a subsidiary of Hilltop Holdings Inc.

OSHA enforces the whistleblower provisions of the Consumer Financial Protection Act and 24 other statutes protecting employees who report violations of various motor vehicle safety, commercial motor carrier, airline, consumer product, environmental, financial reform, food safety, healthcare reform, nuclear, pipeline, public transportation agency, railroad, maritime, securities, tax, antitrust, and anti-money laundering laws and for engaging in other related protected activities. For more information on whistleblower protections, visit OSHA's Whistleblower Protection Programs webpage.

Editor's note: The U.S. Department of Labor does not release the names of employees involved in whistleblower complaints.

Media Contacts:

Mike Petersen, 415-625-2630, petersen.michael.w@dol.gov
Jose Carnevali, 415-625-2631, carnevali.jose@dol.gov

Release Number: 24-595-SAN