- The Federal Deposit Insurance Corp. (FDIC) ordered Umpqua Bank to pay a $1.8 million penalty over what the regulator determined to be unfair and deceptive debt and fee collection practices at the Oregon-based bank’s subsidiary, Financial Pacific Leasing.
- The bank also paid more than $1.6 million in restitution to 16,902 customers who were charged the undisclosed collection fees, according to the FDIC's announcement Monday.
- "We promptly and thoroughly addressed the FDIC’s findings in relation to our subsidiary ... and are confident the critical issues have been successfully resolved," Umpqua said in a statement, according to American Banker.
FinPac, which specializes in commercial equipment financing, charged past-due borrowers undisclosed fees over collection calls and letters and third-party collection, the FDIC said.
The Umpqua Bank subsidiary made excessive and sequential collection calls after customers requested for the calls to stop, the regulator said. Further, FinPac disclosed information about the customers’ debts to third parties and told borrowers it would report delinquencies on commercial debt to consumer reporting agencies, when its policy was not to do so, the FDIC said.
Umpqua Bank neither admitted nor denied the violations in the settlement.