OR bank hit with $1.8 million fine over unfair, deceptive practices; also paid $1.6 million in restitution

Umpqua Bank of Roseburg, Ore., was ordered last week to pay a $1.8 million civil money penalty by a banking agency that cited it for deceptive and/or unfair practices related to certain collection fees and collection practices, according to the order released Monday.

The bank’s violations of the Federal Trade Protection Act (FTPA) were related to collection practices involving commercial equipment financing through its wholly owned subsidiary, Financial Pacific Leasing, Inc. (FinPac), the Federal Deposit Insurance Corp. (FDIC) said.

The FDIC said that in addition to the CMP, the bank voluntarily paid about $1.628 million in restitution to the 16,902 customers who were charged undisclosed collection fees.

The FDIC said it found that FinPAC:

  • charged various undisclosed collection fees to borrowers whose accounts were past due, such as collection call and letter fees and third-party collection fees;
  • engaged in excessive and sequential collection calls to customers, even when customers requested that FinPac stop these calls;
  • disclosed information about the customers’ debts to third parties; and
  • advised borrowers that FinPac would report delinquencies on commercial debt to the consumer reporting agencies, when its policy and practice was not to report such delinquencies to the consumer reporting agencies.

The FDIC said Umpqua Bank agreed to the issuance of the order without admitting or denying the violations.

FDIC Announces Settlement with Umpqua Bank, Roseburg, Oregon for Unfair and Deceptive Practices in Violation of Section 5 of the Federal Trade Commission Act