States reach $4.2 million settlement to resolve credit card interest overcharges
On February 8, state attorneys general from Pennsylvania, Iowa, Massachusetts, New Jersey, and North Carolina entered into an assurance of voluntary compliance with a national bank to resolve allegations that it overcharged credit card interest for certain consumers. According to the investigating states, between February 2011 and August 2017, the bank allegedly failed to properly reevaluate and reduce the annual percentage rate (APR) for certain consumer credit card account holders who were entitled to a reduction, as required by the CARD Act and state consumer protection laws. The announcement follows a 2018 CFPB settlement, in which the bank agreed to provide $335 million in restitution to affected consumers (covered by InfoBytes here). At the time, the Bureau noted that it did not assess civil monetary penalties due to efforts undertaken by the bank to self-identify and self-report violations to the Bureau. The states also acknowledged that the bank self-identified issues with its APR reevaluation process through an internal compliance program. The bank denied liability or that it violated the states’ consumer protection laws and has agreed to pay $4.2 million to approximately 25,000 current and former affected consumers, which will be limited to consumers who received a payment of $500 or more in restitution from the bank for the original violation.