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CFPB issues $9M penalty to Citizens Bank for credit card violations
The CFPB yesterday announced a settlement with Citizens Bank over allegations that the bank “violated consumer financial protection laws and rules that protect individuals when they dispute credit card transactions.” If approved by the court, Citizens Bank will be required to pay a $9 million civil penalty.
This enforcement comes as the result of a 2020 lawsuit filed by the bureau, which alleged that Citizens Bank violated the Truth in Lending Act (TILA) by failing “to reasonably investigate and resolve billing error notices and claims of unauthorized use by making customers jump through unnecessary and burdensome hoops” and “did not provide certain individuals who submitted billing error notices with required acknowledgment and denial notices,” among other things.
Along with the $9 million penalty, the bureau is also requiring Citizens Bank to ensure that its handling of billing error notices and unauthorized use claims comply with TILA requirements.
The credit card market is currently a focus area for the CFPB; NAFCU recently provided comments to the bureau on ways to strengthen the market and continues to advocate against its proposal to reduce the credit card late fees safe harbor.