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Umpqua Bank Fined $1.8M Over Unfair Charges

FDIC levies fine for unfair and deceptive practices in equipment leasing business

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  • Written by  Banking Exchange staff
Umpqua Bank Fined $1.8M Over Unfair Charges

The Federal Deposit Insurance Corporation (FDIC) has fined Oregon-based Umpqua Bank $1.8 million for “unfair and deceptive” practices.

The action relates to collection practices for commercial equipment financing through the bank’s subsidiary, Financial Pacific Leasing (FinPac).

The FDIC determined that FinPac’s collection fee practices were unfair and deceptive. The lender charged “various undisclosed collection fees to borrowers whose accounts were past due, such as collection call and letter fees and third-party collection fees”, the FDIC said.

FinPac also made “excessive and sequential collection calls to customers”, ignoring requests to stop calling. It also disclosed information about customers’ debt to third parties, the FDIC said

The lender also advised borrowers to “report delinquencies on commercial debt to consumer reporting agencies”, despite its policy and practice not to do so.

Umpqua Bank agreed to the FDIC’s fine but has neither admitted nor denied the violations.

However, the bank agreed to pay approximately $1.6 million to the 16,902 customers who were charged the undisclosed collection fees.

Other recent fines levied by the FDIC in recent months include:

  • a $172,500 penalty imposed on Tennessee-based FirstBank for failures relating to flood insurance provision;
  • a $15,000 fine to a former loan officer at Anderson Brothers Bank in South Carolina for unauthorized loan extensions granted to a “personal acquaintance”;
  • a $40,500 penalty for Oriental Bank in Puerto Rico related to failures in flood insurance provision.

In all three cases, the parties neither admitted nor denied the charges but consented to the penalties.

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