On July 9, 2024, the Consumer Financial Protection Bureau (CFPB) announced that it filed a proposed stipulated final judgment and order in its suit against a national bank accused of allegedly opening unauthorized accounts on behalf of consumers.
The proposed judgment would resolve allegations that the bank opened unauthorized accounts in the names of its customers. As previously reported by Goodwin, the CFPB filed a complaint against the bank back in March 2020 alleging that the bank opened unauthorized accounts and enrolled customers in unauthorized products and services without consumers' knowledge or consent. According to the CFPB's amended complaint, the bank opened deposit and credit-card accounts in consumers' names, transferred funds from consumers' existing accounts to new, improperly opened accounts, enrolled consumers in unauthorized online-banking services, and activated unauthorized lines of credit on consumers' accounts. This conduct allegedly violated sections 1031, 1036(a)(1), 1054, and 1055 of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531, 5536(a)(1), 5564, 5565, and also violated the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., and its implementing regulation, Regulation Z, 12 C.F.R. part 1026, the Truth in Savings Act (TISA), 12 U.S.C. § 4301 et seq., and its implementing regulation, Regulation DD, 12 C.F.R. part 1030.
If approved by the court, this order would require the bank to pay a $15 million penalty and provide redress to harmed customers. The bank would also be prohibited from setting performance-management and sales goals for employees that could encourage them to open unauthorized accounts. This proposed judgment comes at the same time that the CFPB announced a consent order in another investigation of this same bank, resolving allegations that it violated consumer protection laws with respect to insurance placed on its auto loans.
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