Consultant Paid More Than $900 Million in Foreclosure Review

Consulting for big banks pays well — really well.

A prominent Washington consulting firm run by a former top U.S. banking regulator was paid $927.5 million to conduct a review of foreclosure files, according to a letter sent by Promontory Financial Group to the Senate Banking Committee.

The disclosure comes as lawmakers on Capitol Hill and New York’s top banking regulator push regulators to more closely scrutinize the relationship between consulting firms and banks, amid concerns that the consultants are not truly independent.

Earlier this week, Deloitte LLP’s financial advisory services unit agreed to pay $10 million and accept a one-year ban from consulting for New York-regulated banks to settle regulators’ allegations the firm mishandled its anti-money-laundering work for U.K. bank Standard Chartered PLC. STAN.LN -1.03%

Under the agreement with New York’s banking regulator, Benjamin M. Lawsky, Deloitte also agreed to overhaul its internal safeguards and create standards to increase its independence from clients.

Federal bank regulators to adopt similar standards, including the disclosure of conflicts of interest and boosting regulators’ monitoring of consultants, says Sen. Sherrod Brown, (D., Ohio), a member of the Senate Banking Committee.  The Office of the Comptroller of the Currency and Federal Reserve should “act immediately to create a similar set of written standards for independent consultants,” Mr. Brown wrote in a letter sent Friday to the two regulators.

“We are actively at work on a set of standards governing the use of consultants retained by national banks and federal thrifts to satisfy a regulatory order, and we expect to finalize them in the near future,” said Bryan Hubbard, a spokesman for the Office of the Comptroller of the Currency. A Fed spokeswoman said the central bank would respond to the letter.

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Hope you all are enjoying your $300 check!