Citizens Bank to pay $35m in penalties and restitution

August 14 01:08 2015

Citizens Bank will pay roughly $35 million in repayments and penalties for failing to credit hundreds of thousands of customers for the full amount of their deposits, federal regulators said Wednesday. Instead, the bank, which operates retail branches in approximately a dozen states, kept the difference when discrepancies arose between the amounts individual and business customers actually deposited and the totals recorded from their deposit slips, the regulators said.

The practice improperly produced millions of dollars in extra bank income, the regulators said. Citizens Bank shares closed down 3.02% at $26.03. The Office of Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau said investigations found the problem arose across operations of the Providence, R.I.-based bank between Jan. 1, 2008 and Nov. 30, 2013.

“Fifty dollars may seem like a small amount to a bank with assets worth billions of dollars, but it is real money to regular people,” CFPB Director Richard Cordray said. ” Consumers deserve to have confidence that they can move their money around securely without exposing themselves to unwelcome risks, such as a bank resolving an error by keeping the difference for itself.” Citizens said it was pleased with the settlements.

Citizens also said the bank is “working with our regulators to make appropriate redress as quickly as possible.” The regulatory settlements require the bank to pay at least $14 million in refunds or restitution to individuals and businesses who lost money as a result of the bank’s practices. Citizens also must pay $20.5 million in federal penalties.