U.S. Bank fined $15M over MUFG’s ‘deceptive practices’

Dive Brief:

U.S. Bank will pay $15 million to the Office of the Comptroller of the Currency to settle allegations that its subsidiary, MUFG Union Bank, deceived customers about certain account fees.
MUFG Union, which was acquired by U.S. Bank last year, misled customers about various fee discounts and waivers tied to its Private Bank Program and safe deposit box rentals, the OCC said. The San Francisco-based bank also failed to waive monthly fees on accounts for customers with mortgages at the bank, despite claims that it would do so, the regulator said.
The bank neither admitted nor denied the charges, according to the consent order.

Dive Insight:

The incidents identified in the order were caused by one or more weaknesses in the design or execution of procedures and internal controls within MUFG Union, resulting in financial gain for the bank, the OCC said.

Between 2005 and 2020, MUFG Union said it would waive or discount the fee for safe deposit box rentals for certain customers. However, the bank did not apply the waivers and discounts as it described, the OCC said.

Between 2011 and 2021, the bank also failed to waive certain fees and discounts for customers of its Private Bank Program, despite claims that it would, the regulator said.

From 2013 to 2021, the bank claimed that it would waive monthly service charge fees for deposit accounts under certain conditions, including if the customer had a mortgage with the bank or if the customer maintained minimum deposit balances across multiple linked accounts.

However, even when customers requested to link either a mortgage or other deposit account, MUFG Union did not always implement the requests, the OCC said.

MUFG Union self-identified the violations and is reimbursing affected customers, the OCC said.

The matters included in the consent order pre-date U.S. Bank’s acquisition of MUFG Union, U.S. Bank told Banking Dive in a statement Friday.

“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,” the bank said.

U.S. Bank first announced plans to purchase MUFG Union from Japan’s Mitsubishi UFJ Financial Group in September 2021.

The $8 billion cash-and-stock deal gave U.S. Bank about 1 million new customers on the West Coast, and added $133 billion in assets, $58 billion in loans and $90 billion in deposits to its balance sheet.