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UDAAP penalties are costly

Answered by: 

Question: 
How much "teeth" does UDAAP really have to penalize a bank
Answer: 

In one enforcement case, the bank's third party vendor processed unauthorized remotely created checks. Because the bank should have recognized the fraud and it failed to act, the bank was hit with a UDAP action. In addition to other penalties there was restitution ordered of $125 million. Other cases involve credit cards and a $6 million restitution and reserve settlement, another was $4 million. The list goes on.

The key is to not start down the path toward a systemic problem that can trigger these types of actions.

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Learn more about Andy Zavoina’s Understanding UDAAP/UDAP and Complaints webinar.

First published on 04/11/2021

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