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A US regulator says it’s reached a $1.5 million settlement with a bank that caused “significant harm” to its customers.
The Federal Deposit Insurance Corporation (FDIC) says Bank of England, based in England, Arkansas, deceived veterans into overpaying for services while not delivering the products they were entitled to.
The regulator says one of the bank’s loan production offices (LPOs) falsely told veterans that 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.
The FDIC also says that the employees misrepresented the firm’s relationship with the VA.
“Veterans and their families who were deceived into refinancing their VA loans were overcharged and did not receive the loan products promised, resulting in significant consumer harm… Today’s announcement demonstrates FDIC’s commitment to ensuring consumers are treated fairly, and that those responsible, including the bank and individuals employed by the bank, are held accountable for their illegal actions…
Based on the FDIC’s findings, the bank made $1.9 million in remediation to over 900 harmed consumers.”
Aside from violating the Federal Trade Commission Act, the FDIC says that the bank also violated the Real Estate Settlement Procedures Act (RESPA), the Fair Credit Reporting Act (FCRA), and the Home Mortgage Disclosure Act (HMDA).
Bank of England has agreed to an Order to Pay Civil Money Penalty (CMP) of $1.5 million. In addition, nine of its former employees have stipulated to individual enforcement actions, and one employee is now banned from the banking industry.
Arkansas Business reports that Bank of England had assets of $412.8 million at the end of 2023, and reported a net loss for the year of $9.95 million, which followed another net loss of $3.86 million in 2022.