RBS US subsidiaries reach settlement with regulators

1 May 2013

US subsidiaries of the Royal Bank of Scotland (RBS) have reached a settlement worth $14 million with the banking regulators after it failed to comply with consumer protection laws.

The RBS subsidiaries were accused of misleading customers about overdraft protection programmes. The bank has neither confirmed or denied the actions, which allegedly took place between 2007 and 2011.

Of all the settlements the one with the Office of the Comptroller of the Currency was the largest. The regulator fined RBS Citizens $5 million and demanded it pay back $2.5 million to around 265,000 customers.

The Federal Deposit Insurance Corporation fined RBS Citizens Bank of Pennsylvania $5 million for similarly misleading customers and ordered it to return $1.4 million to its 75,000 customers.

A spokesman for RBS Citizens said: "We have changed the practices identified in these exam results and are working with our regulators to address any customer impacts that they have identified."

By Gary Cooper

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