WASHINGTON – The Office of the Comptroller of the
Currency has entered into a formal agreement with First Consumers National
Bank, Beaverton, Oregon, that requires the Bank to refund various credit card
fees to customers.
The agreement
requires the Bank to refund annual fees on Bank-issued credit cards charged to
customers on or after December 28, 2002.
On that date, the Bank knew it would have to liquidate its credit card
portfolio and it should have informed customers of that fact when they renewed
or initiated their credit cards. The
Bank did not inform customers who were charged annual fees even though the
credit cards were to be terminated. The
OCC asserted that the Bank’s failure to do so was an unfair and deceptive
practice. The amount of annual fee
refunds is approximately $1.65 million.
The formal
agreement also directs the Bank to refund overlimit fees charged to customers
who exceeded their credit limit as a result of the annual fee charge. The amount of those refunds is approximately
$255,685.
Most of the
customers were reimbursed by the Bank by June 2003 before the Bank transferred
the servicing of its credit cards to a third party, as ordered by the OCC. Today’s agreement also requires the Bank to
provide funds to the new servicer to reimburse the customers who have not yet
received refunds.
The OCC required
the Bank to sell, merge or liquidate as part of a consent order against the
Bank in May 2002. The Bank was
unsuccessful in its efforts to sell or merge so it began liquidation on June
19, 2003.
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The OCC charters, regulates and examines
approximately 2,100 national banks and 52 federal branches of foreign banks
in the U.S., accounting for more than 55 percent of the nation’s banking
assets. Its mission is to ensure a safe and sound and competitive national
banking system that supports the citizens, communities and economy of the
United States.
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