U.S. Bank will pay $15m to settle allegations that its subsidiary MUFG Union Bank “engaged in deceptive practices” and violated of Section 5 of the Federal Trade Commission Act. According to the Office of the Comptroller of the Currency and the consent order, MUFG Union was found misleading its customers about several fee discounts and waivers in relations to the bank’s Private Bank Program and safe deposit box rentals.

Without admitting or denying the findings, the Comptroller found that the bank stated in its account disclosures that:

• Between at least 2011 and 2021: all customers of The Private Bank Program would receive certain fee waivers and discounts – which was only applied to certain customers.
• Between at least 2005 and 2020: it would waive or discount the fee for safe deposit box rentals for certain customers – which did not happen.
• Between at least 2013 and 2021: the bank would waive monthly service charge fees for deposit accounts under certain conditions, including the customers that held mortgages with the Bank or maintained minimum deposit balances across multiple linked accounts. However, it did not disclose that eligible mortgage customers needed to affirmatively request their mortgage be linked to their deposit account to receive the monthly service charge fee waiver. The bank also failed to implement all requests.

According to the Comptroller, these failings were caused by the bank’s weaknesses in the design or execution of procedures and internal controls.

MUFG Union is said to have self-identified these incidents, and is now taking appropriate remedial actions to correct the violations, including reimbursing affected customers.

U.S. Bank acquired MUFG Union Bank last year, in an $8bn cash-and-stock deal, which gave U.S. Bank around one million new customers on the West Coast. The bank also gained $133bn in assets, $58bn in loans and $90bn in deposits to its balance sheet.

Reacting to the ruling, Rob Mason, head of regulatory intelligence at our parent company Global Relay, said it underlined the importance of treating clients fairly, and of being transparent with communications. “While it’s US-based this sounds exactly the sort of case where the FCA’s Consumer Duty rules, due in July 2023, are seeking to bite,” he added.