The Treasury Department’s Office of the Comptroller of the Currency (OCC) announced Thursday a $15 million civil penalty against MUFG Union Bank for “deceptive practices” caused by alleged weaknesses in execution of internal controls and procedures.
Union Bank, which is now a subsidiary of U.S. Bank, agreed to a May 10 consent order, which acknowledged the bank self-identified the alleged violations, is reimbursing customers, and is undertaking remedial actions. The bank neither admitted nor denied the OCC’s findings.
The details: Between at least 2011 and 2021, the bank deceived customers by stating in account disclosures members of the private bank program would receive fee waivers and discounts, the OCC said in the order. During this period, however, only certain customers of the private bank program received fee waivers and discounts as described.
Similarly, between at least 2005 and 2020, the bank offered certain customers waivers and discounts for safety deposit box rentals but did not apply the waivers and discounts as described in account disclosures, the OCC said.
Between 2013 and 2021, the bank claimed it would waive monthly service charge fees for deposit accounts under certain conditions, including customers with a mortgage or those who maintained minimum deposit balances across multiple linked accounts, per the order. However, the bank did not disclose customers must “request their mortgage be linked to their deposit account” to receive the fee waiver, the order stated.
Further, the bank did not always implement requests when a customer tried to link either a mortgage or other deposit account, the OCC said.
Compliance considerations: Union Bank in September 2021 received a cease-and-desist order from the OCC for “unsafe or unsound practices regarding technology and operational risk management.” The bank was ordered then to establish a compliance committee to oversee remediation.
Company response: U.S. Bank completed its acquisition of Union Bank in December.
“The matters included in the consent order were self-identified by Union Bank and pre-date U.S. Bancorp’s acquisition of Union Bank,” the company said in an emailed statement. “The impacted customers and accounts were remediated by Union Bank. We look forward to serving the needs of all our customers now that we have successfully converted Union Bank customers to U.S. Bank.”