Saturday, August 15, 2015

Consumer Watchdog Agency Gets $14 Million For Bank Customers

For those who have forgotten, Massachusetts’ senior Senator Elizabeth Warren first made a splash as chief architect of the legislation that created the Consumer Financial Protect Bureau. Not long after Republicans blocked her chances of becoming head of that agency, she embarked on her Senate campaign.

By way of updating the performance of the CPFB, it has caught another bank cheating its customers and again has secured millions in refunds to said customers. This time it's Citizens Bank skimming off the top of customers' deposits.

Citizens Bank agreed to refund at least $14 million and pay $20.5 million in fines for shortchanging customers who made mistakes on their deposit slips, federal regulators said Wednesday. 

The bank engaged in “shoddy practices that deprived consumers of money that was rightfully theirs,” said Richard Cordray, director of the Consumer Financial Protection Bureau.

From January 2008 to September 2012, Citizens Bank investigated and fixed errors only if the discrepancy was more than $50. From October 2012 to November 2013, the bank lowered that threshold to $25.

The failure to fix errors violated the bank’s own promise in account disclosures to verify deposits, Cordray said.

About $11 million will be refunded to individual account holders, and $3 million to business accounts. In total, more than 475,000 accounts were due refunds not because the bank couldn't do the math to correct deposit errors, but because it refused to if it could make some money off of them. Add another $14 million to the $10.8 billion the agency has secured in its short lifespan for consumers cheated by the financial industry.

That will only make all the Republican presidential candidates, as Charlie Pierce points out, even more committed to getting rid of the CFPB. Because how will the almighty market work if the bankers can't game it?

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