Federal Deposit Insurance Corporation is a United States federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. The FDIC provides coverage for deposits in national banks, in state banks that are members of the Federal Reserve System, and in other qualified state banks. Federal Deposit Insurance Corporation also supervises the Savings Association Insurance Fund, the agency that was created to provide coverage for savings and loan associations. The institution was founded in 1933 and is headquartered in Washington, District Of Columbia. It has regional offices all over the United States.
550 17th Street, NW
Washington, DC 20429-0002
Founded in 1933
Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation and The Office of the Comptroller of the Currency Orders Citizens Bank to Pay $18.5 Million for Failing to Credit Full Deposit Amounts
Aug 12 15
Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) took action against Citizens Bank for failing to credit consumers the full amounts of their deposited funds. The bank kept money from deposit discrepancies when receipts did not match actual money transferred. Today's CFPB consent order requires the bank to provide approximately $11 million in refunds to consumers and pay a $7.5 million penalty for the violations. CFPB action is against Citizens Bank, N.A., formerly known as RBS Citizens Bank, N.A.; Citizens Financial Group, Inc., formerly known as RBS Citizens Financial Group, Inc.; and Citizens Bank of Pennsylvania. For the period at issue, the bank generally required its customers making a deposit to fill out a slip listing the checks or cash being deposited, and their total. The customer then turned the deposit slip over to the bank and got a receipt reflecting the amount on the deposit slip for the transaction. The bank scanned the deposit slip and deposit items at a central location. The CFPB investigation found that from January 1, 2008 to November 30, 2013, Citizens Bank violated the Dodd-Frank Wall Street Reform and Consumer Protection Act's prohibition on unfair and deceptive practices by failing to properly credit consumers' checking and savings accounts. In cases where the bank's scanner misread either the deposit slip or the checks, or if the total on the deposit slip did not equal the total of the actual checks, Citizens Bank did not take action to fix the mistake if it fell below a certain dollar amount. Over the years, by ignoring the discrepancies the bank shorted consumers millions of dollars. Specifically, Citizens Bank: Failed to credit consumers the full amount of their deposits: Citizens Bank frequently did not give consumers full credit for their deposits when the amount scanned on the deposit slip was less than the amount of the checks and cash deposited. The bank credited the consumer's account with what was read on the deposit slip, not the actual sum of money the consumer transferred into the bank. Citizens only investigated and fixed errors when they were above a certain threshold. From January 2008 to September 2012, the bank only looked into discrepancies greater than $50. From September 2012 to November 2013, the bank only looked into discrepancies greater than $25. Citizens Bank told consumers that deposits were subject to verification, implying that the bank would take steps to ensure consumers were credited with the correct deposit amount. But the bank's practice was not to verify and correct deposit inaccuracies unless they were above the $25 or $50 threshold. Although some consumers benefited by this policy, others lost money that rightfully belonged to them. The CFPB concluded that many of those consumers were harmed by this unfair and deceptive practice. Under the Dodd-Frank Act, the CFPB has the authority to take action against institutions engaging in unfair, deceptive, or abusive practices. Today's order requires Citizens Bank to: pay $11 million to consumers who did not receive all the money that should have been deposited into their accounts. Citizens Bank must include any fees the consumer incurred related to the under-crediting, including but not limited to any overdraft fees, insufficient funds fees, and monthly maintenance fees. The bank must also include a reasonable estimate of interest on these amounts. Consumers are not required to take any action to receive their credit or check. If the consumers have an open account with the bank, they will receive a credit to their account. For closed accounts, Citizens Bank will send a check to the affected consumers. Citizens Bank will make a $7.5 million penalty payment to the CFPB's Civil Penalty Fund. The CFPB is taking this action in coordination with the FDIC and the OCC. The FDIC separately ordered Citizens Bank of Pennsylvania to pay restitution and a $3 million civil penalty. The OCC separately ordered Citizens Bank, N.A., to pay restitution and a $10 million civil penalty. In total, Citizens Bank must pay about $11 million in consumer refunds and $20.5 million in federal penalties for these coordinated actions. As part of these actions, the FDIC and OCC are ordering additional relief relating to business accounts.
Federal Deposit Insurance Corporation Announces Settlement with Citizens Bank of Pennsylvania for Unfair and Deceptive Practices Agreement Includes Restitution for Consumers and Businesses
Aug 12 15
The Federal Deposit Insurance Corporation (FDIC) announced a settlement with Citizens Bank of Pennsylvania (CBPA) for unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission Act. Under the settlement, CBPA agreed to an Order for Restitution and Order to Pay Civil Money Penalty. The Order requires CBPA to pay a civil money penalty of $3 million and provide restitution of approximately $5.8 million to consumers and businesses who held more than 475,000 accounts affected by the violations. The FDIC determined that CBPA engaged in unfair and deceptive practices related to the processes by which the bank reconciled deposit discrepancies, specifically the procedures for reconciling discrepancies between the amount of a deposit as stated on an account holder's deposit slip and the actual amount of the deposit. In some cases, CBPA's procedures resulted in consumers and businesses not receiving the full amount of their actual deposits. The Order requires CBPA to correct the violations of law, ensure future compliance with Section 5, and develop and implement a comprehensive restitution plan for all consumers and businesses adversely impacted by the violations. The Order requires CBPA to make restitution to affected consumers and businesses for deposit underpayments that occurred between January 2008 and November 2013. CBPA will provide restitution without requiring any action by those who were affected.
The Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency Finalize Revisions to the Capital Rules Applicable to Advanced Approaches Banking Organizations
Jun 17 15
The Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency finalized revisions to the regulatory capital rules adopted in July 2013. The final rule applies only to large, internationally active banking organizations that determine their regulatory capital ratios under the advanced approaches rule generally those with at least $250 billion in total consolidated assets or at least $10 billion in total on-balance sheet foreign exposures. The agencies published changes to the rules affecting these organizations on December 18, 2014, and the final rule adopts these changes substantially as proposed. The final rule corrects and updates certain aspects of the advanced approaches rule, including the calculation requirements for risk-weighted assets for advanced approaches banking organizations. Many of the changes enhance consistency of the advanced approaches with international capital standards. The final rule will be effective October 1, 2015.