CFPB Enters Into $37.5 Million Penalty With Large National Bank

On July 28, 2022, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with a large national bank to resolve alleged violations of the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., and its implementing regulation, Regulation Z (Reg Z), 12 C.F.R. part 1026; the Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681b(f); and the Truth in Savings Act (TISA), 12 U.S.C. § 4301 et seq., and its implementing regulation, Regulation DD (Reg DD), 12 C.F.R. part 1030; and the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531 and 5536.

According to the CFPB, the Bank allegedly created “sales pressure” that encouraged its employees to illegally access customer credit reports and personal information to open checking and savings accounts, credit cards, and lines of credit without customer authorization.  The CFPB attributed this “sales pressure” to the Bank’s alleged practice of imposing sales goals on its employees as a factor in evaluating employee performance and implementing an incentive-compensation program that financially rewarded employees for selling more financial products and services.

As part of the consent order, the Bank will pay a $37.5 million penalty to the CFPB.  Additionally, the Bank will develop a plan to remediate harmed customers by forfeiting and returning all unlawfully charged fees and costs, plus interest.  In agreeing to the consent order, the Bank neither admits nor denies the Bureau’s allegations. ​