A US regulator says it has reached a $1.5 million settlement with a bank that caused “significant harm” to its customers.
The Federal Deposit Insurance Corporation (FDIC) says the Arkansas-based Bank of England deceived veterans by overcharging for services while not providing the products they were entitled to.
The regulator says one of the bank’s loan origination offices (LPOs) falsely told veterans they could skip multiple loan payments when refinancing a Department of Veterans Affairs (VA) mortgage loan, violating Section 5 of the Federal Trade Commission Act is violated.
The FDIC also says the employees misrepresented the company’s relationship with the VA.
“Veterans and their families who were tricked into refinancing their VA loans were overcharged and did not receive the loan products promised, resulting in significant harm to consumers… Today’s announcement demonstrates the FDIC’s commitment to ensuring that consumers are treated fairly, and that those responsible, including the bank and individuals who work at the bank, are held accountable for their illegal actions…
Based on the FDIC’s findings, the bank earned $1.9 million in remediation for more than 900 affected consumers.”
In addition to violating the Federal Trade Commission Act, the FDIC says the bank also violated the Real Estate Settlement Procedures Act (RESPA), the Fair Credit Reporting Act (FCRA) and the Home Mortgage Disclosure Act (HMDA).
The Bank of England has agreed to an Order to Pay Civil Money Penalty (CMP) of $1.5 million. In addition, nine of the former employees have secured individual enforcement actions, and one employee has now been barred from the banking industry.
Arkansas Business reports that the Bank of England had assets worth $412.8 million at the end of 2023 and reported a net loss of $9.95 million for the year, which followed a new net loss of $3.86 million in 2022.
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Featured image: Midjourney