CFPB Fines FNBO $32M Over ‘Illegal’ Credit Card Practices

The CFPB will collect more than $32 million in fines from First National Bank of Omaha over credit card practices the regulator found to be deceptive. The consumer protection agency found that the bank worked to push consumers into add-on services — services for which they were charged whether or not they ever received them.

The CFPB has ordered the bank to pay out $27.75 million in relief to roughly 257,000 consumers. The remaining $4.5 million — for those keeping score at home — is a penalty fee. The CFPB fine comes separate from the $3 million fine for unfair billing practices that the Office of the Comptroller of Currency has assessed on the bank.

In the case most recently settled, the CFPB contends that First National Bank of Omaha deceived consumers about options like debt cancellation and a credit-monitoring program, on two counts. It hid the fact that it was building them into financial products, and it made the process of canceling said services difficult.

To add insult to injury, when consumers, on rare occasions, did try to use the services, they wren’t actually rendered, according to the CFPB.

The bank has $18 billion in assets, is based in Omaha, NE, and is a unit of First National of Nebraska Inc. It has neither admitted nor denied wrongdoing in the case. The bank’s president, Daniel K. O’Neill, did offer an apology on Thursday (Aug. 25) in a written statement, while also noting that many of the services the CFPB took issue with had been offered through a third-party vendor with whom they have since severed ties.

“While the bank did not intentionally mislead our customers, our oversight of the products and the vendor that administered these products was lacking,” O’Neill wrote. “To put it into familiar terms, we did not provide our intended customer experience. For this, we provide our sincere apology.”

Credit card extras are a particular favorite target for the CFPB. This is the twelfth action the regulator has taken out against a financial company related to such credit card extras.

“First National Bank of Omaha violated the trust of its customers by illegally signing them up for credit card add-on products,” CFPB Director Richard Cordray said on Thursday. “The CFPB’s track record, and this result today, shows strong and consistent action against credit card companies that dupe consumers into buying a product they do not want.”



The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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