On January 14, 2025, the CFPB announced that it had filed a complaint against a large national bank for alleged violations of the Consumer Financial Protection Act (CFPA), the Truth in Savings Act (TISA) and TISA’s implementing regulation, Regulation DD, regarding the bank’s alleged improper interest rate practices.
According to the CFPB’s complaint, the bank offered a savings product to consumers which it advertised as a high interest, no-fee product that provided one of the best interest rates available to consumers on the market. The CFPB alleges that the bank improperly froze the interest rates rather than increasing the interest rate in accordance with market conditions, despite leading consumers through marketing to reasonably expect that their accounts would continue to be serviced with a high interest rate.
The CFPB further alleges that the bank began offering a nearly identical savings product with a higher interest rate, despite representing to consumers that their first savings product would be the only high-interest savings product offered by the bank. The CFPB contends that the bank also took steps to discourage existing customers of its first savings product from switching to the new product, including by declining to notify those customers of its new product, prohibiting employees from sharing information about the new product to those customers, and promoting the new product in a manner that suggested it was merely a re-branding of its first savings product.
The CFPB’s complaint seeks a permanent injunction, consumer redress, and an unspecified civil money penalty.
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