FDIC doles out penalties of nearly $3.2 million in March

Civil money penalties (CMPs) of nearly $3.2 million assessed by the Federal Deposit Insurance Corp. (FDIC) were among the administrative enforcement actions taken against banks and individuals in March, the agency reported Friday.

The penalties were assessed against four banks and one affiliate of a bank. In addition, the agency reported approving seven applications for individuals to participate in the affairs of a financial institution and terminating six consent orders with financial institutions.

The largest of the CMPs, at $2 million, was assessed against The Bancorp Bank of Wilmington, Del., for practices regarding the disclosure and assessment of transaction fees for point-of-sale signature-based transactions without a personal identification number (PINless transactions). According to the FDIC, transaction fees assessed on behalf of the bank by its third-party payment processor for PINless transactions were greater than the Bank disclosed to consumers for such transactions.

In addition to paying the CMP, the bank has also agreed to pay restitution to past and present holders of the bank’s “Excella Cards” and “Non-Excella Cards” who from Dec. 3, 2010, through Nov. 8, 2014, were assessed transaction fees for PINless transactions that exceeded the amount of the fee the bank disclosed to both sets of consumers for such transactions, “and are therefore entitled to reimbursement,” the agency’s order states.

Other CMPs assessed in March, the FDIC said, included:

  • $641,750 against Cross River Bank in Teaneck, N.J., for unfair or deceptive acts or practices in or affecting commerce, and engaging in unsafe or unsound banking practices by failing to ensure an adequate compliance management system was in place;
  • $493,500 against Freedom Financial Asset Management, LLC, of Teaneck (a subsidiary of Cross River Bank) for its role in offering debt relief loans through debt consolidation and engaging in unfair or deceptive acts or practices in the process;
  • $46,800 against Monroe Bank & Trust of Monroe, Mich., for failure to obtain flood insurance for loans and property securing loans, and for failure to follow “force place” flood insurance requirements on other loans;
  • $10,100 against Crest Savings Bank of Wildwood, N.J., for failure to obtain flood insurance for security for property securing loans.

FDIC Makes Public March Enforcement Actions