OCC Assesses Multimillion-Dollar Penalty against South Dakota Bank

The Office of the Comptroller of the Currency ("OCC") assessed a multimillion-dollar penalty against a bank and its affiliate and ordered the bank to identify and make restitution to the customers it harmed.

The OCC found that the bank's billing and marketing practices violated Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1), which prohibits unfair and deceptive acts or practices. The penalty imposed by the OCC reflected a number of factors, including the scope and duration of the violations and financial harm to customers from the unfair and deceptive practices.

The OCC also mandated that the bank (i) improve its governance of third-party vendors associated with add-on consumer products, (ii) develop a risk management program for add-on consumer products marketed or sold by the bank or its vendors, (iii) develop a consumer compliance internal audit program for add-on consumer products and (iv) conduct an add-on product review to, among other things, identify and remediate consumer harm and any program weaknesses.

See: OCC Press Release.