FDIC Issues Consent Order Against Bank

A Utah-based bank (the Bank) recently agreed, without admitting or denying any charges, to a consent order (the Order) with the FDIC.  The FDIC’s allegations against the Bank included, (i) charging customers higher fees than previously disclosed, a violation of section 5 of the Federal Trade Commission Act, deceptive acts and practices in or affecting commerce (Section 5); (ii) not providing specific reasons to customers for adverse actions on their credit applications, a violation of ECOA and its implementing Regulation B; (iii) unsafe and unsound banking practices; and (iv) violations of other laws, as described in an examination report.

Among other actions, under the Order, the Bank must implement a Compliance Management System, specifically designed to address its Section 5 and ECOA violations, to prevent future violations, and within ninety days of the Order’s effective date, the Bank must correct violations described in the examination report and revise its independent audit schedule. Also, it is required to provide progress reports to the FDIC at the end of each quarter.

This is not the first enforcement action that the FDIC has taken against the Bank.