The Consumer Financial Protection Bureau announced a consent decree late last week against M&T Bank. Apparently M&T advertised “no strings attached” free checking without explaining in its advertisements that if an account was inactive for 90 days it would switch to an account that could incur fees if a minimum balance was not maintained. Further, when the account began incurring fees the Bank did not do enough to apprise customers if the change. This provides another example that lenders should look to both for advertising and UDAP compliance. Here, fees would only be incurred under a combination of fairly uncommon circumstances. However, by saying “no strings attached” the bank created what would lead many to expect a no fee account under all circumstances. Moreover, when the account began to incur fees not enough was done to apprise customers as the CFPB found that there was an affirmative duty to inform customers.
Click here to read the entire article on National Mortgage News.
If you have any questions please contact Ari Karen at:
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Ari Karen is an experienced litigator and speaker who has focused his practice in representing financial institutions in both government investigations and litigation before state and federal trial and appellate courts nationwide.
Mr. Karen’s practice is diverse, representing clients on matters concerning banking regulations, Dodd Frank financial reform laws, contractual disputes, employment and labor statutes, wage-hour class actions, employment discrimination and fair lending matters, whistleblower complaints and non-competition claims, among others.