A new study has found that the top 10 U.S. banks are the only ones that can file for a class action lawsuit for mortgage debtors’ losses under a federal law known as the Consumer Financial Protection Bureau.
The law, known as Dodd-Frank, aims to help people make their payments on their mortgages.
The banks that can go to court in a class-action lawsuit are the ones that hold the highest exposure to the mortgages they backed.
The study, from the University of Michigan’s Center for Business and Economic Research, found that all but four of the top five U.A. group’s top 10 mortgage companies are permitted to file for class-wide relief in the form of an order of protection against future lawsuits.
The four banks that are not allowed to file class-specific relief are Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and JPMorgan Chase & Co., according to the study.
The five other top 10 banks are Morgan Stanley, Bank of New York Mellon, Wells Fargo and Bank of Ameritrade.
The report comes as banks across the country continue to face mounting consumer debt.
The number of people who owe more than $100,000 more than they can pay is at a record high, according to data from the Consumer Federation of America.
That number is expected to grow to more than 7.5 million by 2020.
More than two-thirds of Americans who took out a home equity loan in the first quarter of this year were in arrears on their payments, the government reported.
And the average debt-to-income ratio among borrowers in the U. S. has increased from 57 percent in the fourth quarter of 2016 to 61 percent in March.
“The fact that the banks have the legal authority to pursue these lawsuits is really an extraordinary and welcome development,” said Sarah Binder, president and CEO of Consumers Union, a consumer advocacy group.
The banks that were the most likely to file in court in the most recent quarter included Bank of Americans, Bank National Association, Citigroup, Wells, JPMorgan and the UBS Group AG, according the study published Thursday by the Center for Public Integrity.