Fifth Third Bank has been slapped with a hefty $20 million fine by the Consumer Financial Protection Bureau for engaging in unethical practices, including opening unauthorized accounts in customers’ names and forcing unnecessary auto insurance onto borrowers who already had coverage. The bank is also required to make redress payments to 35,000 affected consumers, with 1,000 individuals having their cars repossessed due to the fraudulent actions of the bank.
CFPB Director Rohit Chopra expressed concern over Fifth Third Bank’s egregious actions, emphasizing the harm caused to nearly 1,000 families who lost their vehicles due to excessive charges on their auto loan bills. The penalty also includes provisions to prevent the bank from incentivizing fraudulent account openings as part of employee sales quotas. The fine of $20 million is split between addressing the fake account offenses and the imposition of unnecessary insurance policies on loan borrowers.
In response to the settlement, Fifth Third Bank stated that it is committed to rectifying the issues, implementing corrective measures, and ensuring that customers are appropriately compensated under the oversight of the CFPB. This is not the first time the Cincinnati-based bank has faced regulatory action, as it was previously fined by the CFPB for discriminatory auto-loan pricing and illegal credit card practices in 2015. With a network of 1,300 branches in 12 states and significant assets, Fifth Third Bank aims to move past these regulatory challenges and refocus on creating lasting value for its stakeholders and communities.
