International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Tuesday, August 25, 2015

Citizens Bank of Pennsylvania Settles Unfair and Deceptive Practices for $8.8 Million Fine and Restitution

The Federal Deposit Insurance Corporation (FDIC) announced a settlement with Citizens Bank of FDIC logoPennsylvania, Philadelphia, Pennsylvania (CBPA), for unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission Act. Under the settlement, CBPA agreed to an Order for Restitution and Order to Pay Civil Money Penalty (Order). The Order requires CBPA to pay a civil money penalty of $3 million and provide restitution of approximately $5.8 million to consumers and businesses who held more than 475,000 accounts affected by the violations.

The FDIC determined that CBPA engaged in unfair and deceptive practices related to the processes by which the bank reconciled deposit discrepancies, specifically the procedures for reconciling discrepancies between the amount of a deposit as stated on an account holder's deposit slip and the actual amount of the deposit. In some cases, CBPA's procedures resulted in consumers and businesses not receiving the full amount of their actual deposits. The Order requires CBPA to correct the violations of law, ensure future compliance with Section 5, and develop and implement a comprehensive restitution plan for all consumers and businesses adversely impacted by the violations. The Order requires CBPA to make restitution to affected consumers and businesses for deposit underpayments that occurred between January 2008 and November 2013. CBPA will provide restitution without requiring any action by those who were affected.

The FDIC is taking this action in coordination with separate actions by the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC). The CFPB's action is against Citizens Financial Group, Inc., Citizens Bank, N.A., and CBPA. The OCC's action is against Citizens Bank, N.A. Each action relates to similar unfair and deceptive practices.

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