On January 3, 2019, the Consumer Financial Protection Bureau (CFPB) announced a settlement with a federal savings bank for alleged violations of the Electronic Fund Transfer Act (EFTA) and Regulation E, as well as alleged violations of the Consumer Financial Protection Act of 2010 (CFPA). According to the CFPB press release, the savings bank has been ordered to provide approximately $12 million in restitution, and pay a $3.5 million civil money penalty. This is the first CFPB enforcement action under Director Kathy Kraninger.

THE ALLEGED VIOLATIONS -

The CFPB alleged that the savings bank violated the EFTA and its implementing Regulation E by (i) failing to correctly honor customers’ stop-payment requests on preauthorized electronic fund transfers (EFTs); and (ii) failing to conduct reasonable error resolution investigations. In addition, the CFPB alleges that the savings bank violated the CFPA by reopening deposit accounts that customers had closed without seeking prior authorization or providing adequate notice.