WASHINGTON–The FDIC’s Office of Inspector General is chastising the agency for missing impermissible fees charged to customers by one of its insured banks, with the fees instead discovered by another regulator.
The OIG said the bank, which is not identified in a report it published, charged an estimated $7 million in fees it should not have assessed. The agency that found the impermissible fees was also not identified, nor was the time frame.
“We found that the FDIC, during its examinations, had not identified that the Bank and a third party had charged impermissible fees to loan applicants. Instead, another Federal Government Agency identified the impermissible fees and advised the FDIC about the issue,” the OIG report states. “The impact to the consumers from the impermissible fees is compounded because the fees were paid for out of the loan proceeds, thus reducing available funds and requiring interest payments from the borrowers over the life of the loan.
“We conservatively estimated that the prohibited fees charged to the borrowers amounted to at least $7.2 million,” the report added.
According to the OIG, the FDIC was involved in “several conversations” with the other unidentified federal agency before and after that agency took an enforcement action against the bank.
‘Never Raised Concerns’
“However, the FDIC officials acknowledged that they never raised concerns with the Federal Government Agency regarding these impermissible fees,” the OIG report stated. “Further, the FDIC did not request for its own Legal Division to review or provide an opinion on the fee issue.”
In addition, the OIG said it further found the FDIC did not effectively coordinate with the other federal agency to assess the impact of the prohibited fees on consumer protection compliance and on the bank’s own safety and soundness. Nor did the FDIC, the OIG report goes on to say, assess the “potential consumer harm caused by the impermissible fees, nor whether enforcement action would be appropriate.”
Instead, FDIC recommended that that the bank, considered to be in “unsatisfactory condition,” should coordinate further with the other federal agency, according to the OIG, which added, “We believe that the FDIC should act urgently to address these impermissible fees imposed on the consumers.”