By Jesse Hamilton
WASHINGTON - Royal Bank of Scotland Group Plc will pay $10 million in fines and $3.9 million in restitution to settle two banking regulators’ claims that the lenders’ U.S. units deceived retail banking customers.
RBS Citizens NA agreed to pay a $5 million penalty and return $2.5 million to 265,000 customers to resolve the Office of the Comptroller of the Currency claims, and Citizens Bank of Pennsylvania was fined $5 million and will repay $1.4 million to more than 75,000 people in settling with the Federal Deposit Insurance Corp., the agencies said in statements today.
The subsidiaries of Edinburgh-based RBS, Britain’s biggest government-owned lender, were accused of misleading customers of overdraft protection, checking rewards and other programs. The settlement, in which the bank neither admitted nor denied the claims, includes restitution for customers who received inaccurate or misleading disclosures about the programs between 2007 and 2011, the OCC and FDIC said.
“We take the results of these regulatory exams very seriously,” Jim Hughes, a spokesman for RBS Citizens Financial Group, said in an e-mailed statement. “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.”
The agreement with banking regulators follows a filing yesterday by RBS subsidiary Westminster Bank Plc that the company may face Securities and Exchange Commission civil or administrative action after getting a so-called Wells notice related to a 2007 offering of residential mortgage-backed securities.