Citizens Private Wealth, Llc

Allegations: VIOLATION OF THE TRUTH IN LENDING ACT, REGULATION Z AND THE CONSUMER FINANCIAL PROTECTION ACT. Status: Pending Summary: VIOLATION OF THE TRUTH IN LENDING ACT, REGULATION Z AND THE CONSUMER FINANCIAL PROTECTION ACT.

Allegations: ON AUGUST 12, 2015, THE U.S. CONSUMER FINANCIAL PROTECTION BUREAU ("CFPB") ISSUED A CONSENT ORDER ("CFPB ORDER") AGAINST CITIZENS FINANCIAL GROUP, INC.; CITIZENS BANK, N.A.; AND/OR CITIZENS BANK OF PENNSYLVANIA (COLLECTIVELY, "CITIZENS") RELATING TO DEPOSIT RECONCILIATION PRACTICES FROM JANUARY 2008 THROUGH NOVEMBER 2013. THE CFPB ORDER STATES THAT: (A) CITIZENS ENGAGED IN UNFAIR ACTS OR PRACTICES IN VIOLATION OF 12 U.S.C §§ 5531,5536 BY PROCESSING DEPOSITS SUCH THAT CERTAIN CUSTOMERS DID NOT RECEIVE CREDIT FOR THE FULL AMOUNT OF DEPOSITED FUNDS; AND (B) CITIZENS DISCLOSURES RELATING TO THE DEPOSIT PROCESS WERE DECEPTIVE IN VIOLATION OF 12 U.S.C §§ 5531,5536. CITIZENS SECURITIES, INC. WAS NOT NAMED IN THE CFPB ORDER OR SUBJECT TO IT IN ANY WAY. Status: Final Sanction Detail: IN THE CFPB ORDER, CITIZENS AGREED TO PAY REDRESS TO AFFECTED CUSTOMERS OF AN AMOUNT OF APPROXIMATELY $11 MILLION AND PAY A CIVIL MONEY PENALTY IN THE TOTAL AMOUNT OF $7.5 MILLION, WHICH WAS PAID ON AUGUST 14, 2015. IN THE CFPB ORDER, CITIZENS AGREED TO NOT VIOLATE 12 U.S.C §§ 5531 AND 5536 IN CONNECTION WITH DEPOSIT TRANSACTIONS AND RESOLVING DEPOSIT DISCREPANCIES. IN ADDITION, CITIZENS AGREED THAT (A) THEY MUST CORRECT ALL VIOLATIONS OF LAW DESCRIBED IN THE CFPB ORDER AND IMPLEMENT PROCEDURES TO PREVENT THEIR OCCURRENCE; (B) THEY MUST DEVELOP A WRITTEN CONSUMER COMPLIANCE INTERNAL AUDIT PROGRAM FOR PROCESSING OF DEPOSITS AND DEPOSIT DISCREPANCIES; (C) THEY MAY NOT MISREPRESENT, OR ASSIST OTHERS IN MISREPRESENTING, EXPRESSLY OR IMPLIEDLY THEIR DEPOSIT PROCESSING PRACTICES; (D) CITIZENS BOARD OF DIRECTORS MUST ESTABLISH A COMPLIANCE COMMITTEE OF AT LEAST THREE RESPONSIBLE FOR MONITORING AND COORDINATING CITIZENS COMPLIANCE WITH THE CFPB ORDER (E) THE COMPLIANCE COMMITTEE WILL SUBMIT TO THE CFPB A COMPLIANCE PLAN (F) CITIZENS BOARD MUST (I) AUTHORIZE CITIZENS ACTIONS TO COMPLY WITH THE CFPB ORDER; (II) REQUIRE TIMELY REPORTING BY MANAGEMENT TO THE BOARD OF THE STATUS OF COMPLIANCE OBLIGATIONS, AND (III) REQUIRE TIMELY AND APPROPRIATE CORRECTIVE ACTION TO REMEDY ANY MATERIAL NON-COMPLIANCE WITH SUCH BOARD DIRECTIVES; (G) CITIZENS MUST NOTIFY THE CFPB OF ANY DEVELOPMENT THAT MAY AFFECT COMPLIANCE OBLIGATIONS UNDER THE CFPB ORDER AND PROVIDE WRITTEN COMPLIANCE PROGRESS REPORTS; (H) CITIZENS MUST DELIVER A COPY OF THE CFPB ORDER TO THEIR BOARD MEMBERS, EXECUTIVE OFFICERS AND OTHERS WHO HAVE RESPONSIBILITIES RELATING TO THE SUBJECT MATTER OF THE CFPB ORDER; AND (I) CITIZENS MUST CREATE AND RETAIN CERTAIN BUSINESS RECORDS. Summary: IN SETTLEMENT OF THIS MATTER, CITIZENS CONSENTED AND AGREED TO THE ISSUANCE OF THE CFPB ORDER, WHICH THE CFPB HAS DETERMINED TO ACCEPT AND HAS ISSUED. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE CFPB ORDER ARE DESCRIBED ABOVE IN ITEMS 7 AND 12.

Allegations: ON AUGUST 12, 2015, THE U.S. COMPTROLLER OF THE CURRENCY ("OCC") ISSUED A CONSENT ORDER AND A CONSENT ORDER FOR A CIVIL MONEY PENALTY ("OCC ORDERS") AGAINST CITIZENS BANK, NATIONAL ASSOCIATION ('CITIZENS BANK") RELATING TO DEPOSIT RECONCILIATION PRACTICES FROM JANUARY 2008 THROUGH NOVEMBER 2013. THE OCC ORDERS STATE THAT CITIZENS BANK ENGAGED IN UNFAIR AND DECEPTIVE PRACTICES IN VIOLATION OF SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT ("FTC ACT") IN THAT (A) DISCREPANCIES OCCURRED BETWEEN THE AMOUNT OF FUNDS DEPOSITED BY CITIZENS BANK CUSTOMERS AND THE AMOUNT OF FUNDS ENCODED FROM CUSTOMERS' ACCOMPANYING DEPOSIT SLIPS; (B) CITIZENS BANK EMPLOYEES FAILED TO FOLLOW CONSISTENTLY REVIEW PROCEDURES IN ORDER TO RECONCILE AND CORRECT DISCREPANCIES IN CERTAIN INSTANCES; (C) CITIZENS BANK FAILED TO NOTIFY AFFECTED CUSTOMERS OF CERTAIN DISCREPANCIES AND CERTAIN CUSTOMERS MAY NOT HAVE RECEIVED CREDIT FOR CERTAIN AMOUNTS ACTUALLY DEPOSITED; AND (D) CITIZENS BANK'S DEPOSIT ACCOUNT AGREEMENTS FAILED TO DESCRIBE ACCURATELY CITIZENS BANK'S PROCESS FOR RESOLVING THESE DISCREPANCIES AND HOW RESULTING ADJUSTMENTS TO DEPOSITORS' ACCOUNTS WERE MADE. IN ADDITION, THE OCC ORDERS STATE THAT CITIZENS BANK'S FAILURE TO PERFORM APPROPRIATE RISK ASSESSMENTS AND IMPLEMENT APPROPRIATE INTERNAL CONTROLS AND STAFFING FOR DEPOSIT RECONCILIATION PRACTICES CONSTITUTED UNSAFE AND UNSOUND PRACTICES. Status: Final Sanction Detail: IN THE OCC ORDERS, CITIZENS BANK AGREED TO PAY A CIVIL MONEY PENALTY IN THE TOTAL AMOUNT OF $10 MILLION, WHICH WAS PAID ON AUGUST 12, 2015. IN THE OCC ORDERS, CITIZENS BANK AGREED: (A) THAT THE BOARD OF DIRECTORS OF CITIZENS BANK SHALL APPOINT AND MAINTAIN AN ACTIVE COMPLIANCE COMMITTEE OF AT LEAST THREE DIRECTORS THAT SHALL BE RESPONSIBLE FOR MONITORING AND OVERSEEING CITIZENS BANK'S COMPLIANCE WITH THE OCC ORDERS; (B) TO SUBMIT TO THE OCC AN ACCEPTABLE PLAN CONTAINING A COMPLETE DESCRIPTION OF THE ACTIONS THAT ARE NECESSARY AND APPROPRIATE TO ACHIEVE COMPLIANCE WITH CERTAIN PROVISIONS OF THE OCC ORDERS; (C) TO MAKE FULL REIMBURSEMENT, AS DESCRIBED IN THE OCC ORDERS, TO ALL ELIGIBLE CUSTOMERS; (D) TO DEVELOP AND SUBMIT TO THE OCC A REIMBURSEMENT PLAN APPROVED BY CITIZENS BANK'S BOARD; (E) TO RETAIN AN INDEPENDENT CONSULTANT TO REVIEW AND ASSESS COMPLIANCE WITH THE TERMS OF THE REIMBURSEMENT PLAN; (F) TO SUBMIT A WRITTEN RISK MANAGEMENT PROGRAM FOR ITS DEPOSIT RECONCILIATION PRACTICES; AND (G) TO SUBMIT THE WRITTEN PLANS, PROGRAMS, POLICIES, AND PROCEDURES REQUIRED BY THE OCC ORDERS TO THE OCC FOR REVIEW AND PROVIDE QUARTERLY WRITTEN PROGRESS REPORTS. Summary: IN SETTLEMENT OF THIS MATTER, CITIZENS BANK CONSENTED AND AGREED TO THE ISSUANCE OF THE OCC ORDERS, WHICH THE OCC HAS DETERMINED TO ACCEPT AND HAS ISSUES. THE ALLEGATIONS, DISPOSITIONS, FINDINGS AND SANCTIONS OF THE OCC ORDERS ARE DESCRIBED IN ITEMS 7 AND 12.