Back in April, the OTS imposed a $400,000 CMP and a $12 million restitution order on Woodforest Bank, Refugio, TX, a federally chartered savings association. Today, the OCC
announced that it has imposed a $1 million CMP on an affiliate, Woodforest National Bank, Houston, TX. Both banks are subsidiaries of Woodforest Financial Group, and many of their hundreds of branches are in Walmart stores.
The OCC also announced that it has reached a settlement with Woodforest National Bank requiring the bank to pay out about $32 million in restitution.
Both cases focus on the banks'
Privilege Pay overdraft program.
Quoting from today's OCC news release --
The settlement is based on the OCC’s conclusion that the bank engaged in unfair or deceptive practices that violated the Federal Trade Commission Act. Specifically, the bank assessed excessive amounts of overdraft fees and improperly assessed recurring fees, or “continuous overdraft fees” against certain consumers. In addition, in its marketing brochures the bank emphasized the free or low cost features of certain accounts while omitting information about costly features such as overdraft protection. The bank’s marketing also suggested that certain accounts were well-suited for consumers who had previous difficulty in managing their bank accounts, while omitting information about the high-cost features of its overdraft protection.