The FDIC announced settlements with a bank and its institution-affiliated party for alleged unsafe or unsound banking practices and unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission Act. The consent orders were issued based on findings that the financial institutions were charging student account holders multiple nonsufficient fund fees from a single merchant transaction; allowing these accounts to remain in overdrawn status over long periods of time, thus allowing NSF fees to continue accruing; and collecting the fees from subsequent deposits to the students' accounts, typically funds for tuition and other college expenses. As part of the settlements, both financial institutions have agreed to consent orders, providing for restitution of approximately $11 million to approximately 60,000 students; civil money penalties; and corrective measures, including changes to NSF fees practices. Moreover, although the bank did not operate the student debit card program, it was held responsible for its role in issuing the debit cards used in the program, and required to improve its compliance and auditing processes and terminate its relationship with its institution-affiliated party.
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