WA bank fined $500k over FTC Act, RESPA violations

A bank that the federal bank deposit insurer said violated Federal Trade Commission (FTC) Act and Real Estate Settlement Procedures Act (RESPA) rules was assessed a $500,000 civil money penalty (CMP) in March, the Federal Deposit Insurance Corp. (FDIC) said in an order announced Friday.

The consent order against First Fed Bank, Port Angeles, Wash., states that the bank:

  • violated section 5 of the FTC Act – which bars unfair or deceptive acts or practices in or affecting commerce – by making implied claims that credit products with non-optional debt cancellation features were unemployment insurance, approving consumers who did not qualify for the debt cancellation feature, and misrepresenting the fees and benefits for those products; and
  • violated RESPA’s section 8 – which prohibits kickbacks and unearned fees – by entering into mortgage lead generation arrangements with a real estate brokerage firm and the operator of an online loan marketplace that were used to facilitate and disguise referral payments for mortgage business.

The order was among 11 enforcement orders the FDIC issued in March, the agency said. The others included one prohibition order, one combined prohibition order and order voluntarily dismissing notice of assessment and order to pay a CMP, two consent orders, another order to pay a CMP, and five orders for the voluntary termination of deposit insurance.

FDIC Makes Public March Enforcement Actions

March 2024 Enforcement Decisions and Orders

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