The FDIC released a compliance summary noting key findings and performance of the banks examined in 2018. The report states:
As of December 31, 2018, 98 percent of all FDIC-supervised institutions were rated satisfactory or better for consumer compliance (“1” or “2”). The high percentage of institutions rated satisfactory or better for consumer compliance indicates that the vast majority of supervised institutions maintain effective programs to manage their consumer compliance responsibilities, even during a period of significant regulatory change.
The summary also notes the most frequently cited violations in compliance reviews as well as total fines and restitution made to consumers in 2018.
Most Frequent Violations
- Truth in Lending Act (Regulation Z) –failure to properly calculate or disclose the finance charge or annual percentage rate for mortgage loans; and disclosing fees on the closing disclosure that exceeded the tolerances permitted by the regulation;
- Truth in Savings Act (Regulation DD) –failure to include applicable and accurate information on account disclosures; Electronic Funds Transfer (Regulation E) –failure to properly investigate and determine whether an error occurred and transmit the results of the investigation and determination to the consumer within the prescribed timeframe after receiving notice of the error;
- Flood Disaster Protection Act (FDPA) –making, increasing, extending or renewing a designated loan with no flood insurance coverage, or an insufficient amount of flood insurance coverage; and
- Equal Credit Opportunity Act/Regulation B –failure to provide applicants with a notice in writing of the applicant’s right to receive a copy of all written appraisals developed in connection with the application within three business days of receiving the application for credit; charging unmarried joint applicants higher fees for credit reports than married joint applicants for residential and consumer loans; erroneously obtaining information about the applicant or other person’s race, color, religion, national origin, or sex in connection with a credit transaction for specific loan products prohibited from collecting such information; and, failure to provide specific and principal reasons for adverse action to applicants denied credit.
CMP’s & Enforcement Actions
In addition, the FDIC issued a total of 21 consumer compliance-related formal enforcement actions where Civil Money Penalties (CMPs) were issued against institutions under delegated authority totaling approximately $3.5 million for 2018.
Restitution paid to consumers totaled approximately $18.1 million to 268,918 consumers pursuant to formal enforcement actions and approximately $4 million to 49,000 consumers in voluntary payments for 2018.