A massive bank now gets charged $44m for freezing accounts, charging hidden fees, and deceiving its customers, per a PR.
Green Dot Bank, widely known for defrauding its customers, is now being charged a whopping $44,000,000 for numerous deceptive practices.
The Federal Reserve Board has taken action to address consumer compliance issues with the financial services firm Green Dot.
Green Dot was found to have violated consumer laws in its marketing, selling, and servicing of prepaid debit card products, as well as in its offering of tax return preparation payment services.
For instance, the firm failed to adequately disclose the tax refund processing fee for tax preparation services offered on a third-party website.
Green Dot also blocked access to accounts of legitimate customers receiving unemployment benefits and lacked reasonable policies and procedures to help those customers resolve the account blocks.
Additionally, the firm did not maintain effective consumer compliance risk management and anti-money laundering programs.
As a result, the Federal Reserve Board is requiring Green Dot to take several corrective actions.
This includes hiring an independent third-party to strengthen its consumer compliance risk management program and address the root causes of consumer complaints.
The firm also must develop an effective anti-money laundering program and hire an independent third-party to conduct a review of certain transaction activities.
Last year, several reports were submitted to the Better Business Bureau (BBB) regarding customers losing access to their money, though nothing was accomplished.
“My funds are gone. I believe now the bank [Green Dot Bank] is holding it hostage.
It’s my SS money and I can’t get it back, they keep extending the date.
I’ll get my new card with my money on it this has been going on since the August 1 and I was in the hospital when I was hacked.
I want my money it’s mine not yours green dot,” said Sandra Machuga, who’s reported to FrankNez before.
This is a developing story.
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Also Read: The US Treasury Direct is Now Freezing Customer Accounts
Other Banking News Today
Massive US banks now prepare for millions to default according to Q2 reports, as institutions increase capital to cover insolvencies.
Big banks such as JPMorgan Chase, Bank of America and Wells Fargo are boosting their financial defenses as they prepare for customer inflow to dwindle, affecting the ability for the average American to pay their bills.
According to the latest Q2 2024 financial reports from major banks, they are significantly increasing the amount of capital they are setting aside to cover potential losses from rising credit card and loan defaults.
Collectively, these banks are allocating billions of dollars into emergency provisions and loan loss reserves to prepare for an anticipated increase in insolvencies and non-performing loans.
This reflects the banks’ growing concerns about the potential for a rise in credit card delinquencies and loan defaults in the coming months.
By bolstering their loss-absorbing capital buffers, the banks are attempting to proactively mitigate the financial risks posed by a potential surge in credit-related delinquencies and insolvencies.
This suggests the banks foresee a deterioration in consumer credit quality and are taking prudent steps to strengthen their balance sheets and resilience against such adverse credit trends.
The significant increase in these emergency loan loss provisions across the banking sector signals that the institutions are bracing for a potential economic downturn that could lead to a rise in loan defaults and credit-related write-offs.
This move underscores the banks’ efforts to position themselves to better withstand any upcoming challenges in the credit markets.
JPMorgan Chase is leading the way, increasing its provisions from $1.88 billion in the first quarter of this year to $3.05 billion – a $1.17 billion jump.
Meanwhile, Bank of America has set aside $1.5 billion, up from $1.3 billion in the previous quarter, and Wells Fargo set aside $1.24 billion, up from $938 million in the previous quarter.
The increasing balances show banks are anticipating increasing economic risk in the months ahead as commercial real estate flounders and as consumers pile up a whopping $1.02 trillion in credit card balances, according to TransUnion.
Delinquency rates across various types of debt are already on the rise, and the New York Federal Reserve says total US household debt hit $17.69 trillion in the first quarter of this year, an increase of $184 billion from the previous quarter.
The number includes mortgage balances, which rose by $190 billion to $12.44 trillion, and auto loans, which increased by $9 billion to $1.62 trillion.
Also Read: A Massive US Bank is Now Closing Credit Cards
Also Read: A Massive Bank Now Freezes Money From Direct Deposits
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