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CFPB, FDIC and OCC Issue Joint Enforcement Action against Pennsylvania Bank for Faulty Deposit Reconciliation Practices

The Consumer Financial Protection Bureau ("CFPB"), the FDIC and the Office of the Comptroller of Currency ("OCC") issued a joint enforcement action against a Pennsylvania bank for "unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission Act."

The regulatory agencies found that bank practices related to reconciling deposits failed to resolve discrepancies between the amount of funds deposited by customers and the amount encoded from the accompanying deposit slip. The regulatory agencies stated that the bank failed to notify customers when discrepancies were found, failed to correct deposit amounts and did not describe accurately the bank's process for resolving such discrepancies. The regulatory agencies discovered that the bank also falsely told customers it would verify their deposits even though the bank's policy was to verify and correct deposit inaccuracies only if they were above $25 or $50 thresholds.

The joint enforcement action ordered the bank to pay "at least" $34.5 million in total for failing to credit to customers' accounts the full amount of their deposits, which included providing restitution of approximately $5.8 million to consumers and businesses which held more than 475,000 accounts affected by the violations.

This joint enforcement action also marked the CFPB's first action involving illegal practices in connection with deposit processing. CFPB Director Richard Cordray commented that the CFPB "will continue to take appropriate action against those we find to be deceiving or taking advantage of consumers."

See: CFPB Consent Order.

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