1.

The Bureau has jurisdiction over this matter under §§ 1053 and 1055 of the CFPA, 12

U.S.C. §§ 5563 and 5565. By issuing credit cards to consumers without the consumers’

consent and not in response to an oral or written request or application for the card or as a

renewal of, or substitute for, an accepted credit card, ( Insert Your Bank Here) violated

TILA and Regulation Z, 15 U.S.C. § 1642; 12 C.F.R. § 1026.12(a) 5 U.S.C. §8 - market

manipulation and allocation.

“( Insert Your Bank Here) “means ( Insert Your Bank Here), N.A., and its successors

and assigns.

( Insert Your Bank Here) is a “covered person” under 12 U.S.C. § 5481(6). ( Insert Your

Bank Here) Violations of Law Regarding Online Advertisements of Rewards Cards and

Sign-Up Bonuses

It was ( Insert Your Bank Here) practice to obtain consumer reports in the course of

considering consumers for new credit cards. ( Insert Your Bank Here) used or obtained

consumer reports to consider consumers for new credit cards even when the consumers

had not applied for or did not want the products and where ( Insert Your Bank Here) did

not otherwise have a permissible purpose for the consumer reports.

( Insert Your Bank Here) has not addressed a root cause of Relevant Account-Opening

Practices—individual sales goals and sales-based compensation—by eliminating sales

center employees primarily responsible for the sale of consumer credit card accounts as

of January 1, 2023.

( Insert Your Bank Here) has not addressed a root cause of Relevant Account-Opening

Practices—individual sales goals and sales-based compensation—by eliminating sales

goals both for compensation incentives and for performance management for financial

center employees primarily responsible for the sale of consumer credit card accounts as

of January 1, 2023.

“Account-Opening Affected Consumers” means consumers who may have been

negatively impacted by Relevant Account-Opening Practices during the Account-

Opening Notice Period and who have not previously received redress.

“Affected Consumers” means any consumer subjected to any of the Improper Sales

Practices. ( Insert Your Bank Here) employees submitted applications for and obtained

credit cards for consumers without the consumers’ knowledge or consent.

“Consumer Financial Product or Service” is defined in 12 U.S.C. § 5481 and means

any financial product or service that is described in one or more categories under— (A)

paragraph (15) of 12 U.S.C. § 5481 and is offered or provided for use by consumers

primarily for personal, family, or household purposes; or (B) clause (i), (v), (vii), (ix), or

(x) of paragraph (15)(A) of 12 U.S.C. § 5481, and is delivered, offered, or provided in

5481(5)(A).

“Relevant Account-Opening Practices” means submitting applications on behalf of,

opening, issuing, activating, or enrolling a consumer in credit cards without the

consumer’s consent.

( Insert Your Bank Here) Violations of FCRA

Section 604(f) of FCRA mandates that consumer reports be used or obtained only for

permissible purposes enumerated in the statute. 15 U.S.C. § 1681b(f).

Under FCRA, a “person shall not use or obtain a consumer report for any purpose

unless—(1) the consumer report is obtained for a purpose for which the consumer report

is authorized to be furnished” and one other condition is met. 15 U.S.C. § 1681b(f).

The authorized purposes specified in FCRA include consumer reports furnished “in

connection with a credit transaction involving the consumer on whom the information is

to be furnished and involving the extension of credit to, or review or collection of an

account of, the consumer.” 15 U.S.C. § 1681b(a)(3)(A).

By using or obtaining consumer reports without a permissible purpose, ( Insert Your

Bank Here) violated § 604(f) of FCRA, 15 U.S.C. § 1681b(f).

Under § 1036(a)(1)(A) of the CFPA, it is unlawful for covered persons to “offer or

provide to a consumer any financial product or service not in conformity with Federal

consumer financial law, or otherwise commit any act or omission in violation of a federal

consumer financial law.” 12 U.S.C. § 5536(a)(1)(A).

By violating TILA, and FCRA, ( Insert Your Bank Here) committed acts or omissions in

violation of Federal consumer financial laws. Accordingly, ( Insert Your Bank Here)

violated § 1036(a)(1)(A) of the CFPA. 12 U.S.C. § 5536(a)(1)(A).

( Insert Your Bank Here) and its officers, agents, servants, and employees and attorneys,

who have actual notice of this Consent Order, in connection with the Relevant Account-

Opening Practices, whether acting directly or indirectly, may not violate sections 1031

and 1036 of the CFPA, 12 U.S.C. §§ 5531 and 5536; TILA, 15 U.S.C. § 1601 et seq., and

its implementing regulation, Regulation Z, 12 C.F.R. part 1026; or FCRA, 15 U.S.C. §

1681b(f) by opening credit cards without the consumer’s consent.

Provide redress to Account-Opening Affected Consumers. The Redress Plan must

also describe the redress amounts ( Insert Your Bank Here) will provide to Account-

Opening Affected Consumers and include and describe procedures for the ( Insert Your

Bank Here) to support and provide to the Bureau any determination made by the ( Insert

Your Bank Here) that providing redress to particular Account-Opening Affected

Consumers is impracticable.
By opening unauthorized deposit accounts and engaging in acts of simulated funding, (

Insert Your Bank Here) caused and was likely to cause substantial injury to consumers

that was not reasonably avoidable, because it occurred without consumers’ knowledge,

and was not outweighed by countervailing benefits to consumers or to competition.

Thousands of ( Insert Your Bank Here) employees engaged in Improper Sales Practices

to satisfy sales goals and earn financial rewards under ( Insert Your Bank Here)

incentive compensation program.

( Insert Your Bank Here) employees engaged in “simulated funding.” To qualify for

incentives that rewarded bankers for opening new accounts that were funded shortly after

opening, ( Insert Your Bank Here) employees opened deposit accounts without

consumers’ knowledge or consent and then transferred funds from consumers’ authorized

accounts to temporarily fund the unauthorized accounts in a manner sufficient for the

employee to obtain credit under the incentive-compensation program.

( Insert Your Bank Here) employees requested debit cards and created personal

identification numbers (PINs) to activate them without the consumer’s knowledge or

consent.
Therefore, ( Insert Your Bank Here) engaged in “unfair” and “abusive” acts or practices

that violate §§ 1031(c)(1), (d)(1), (d)(2)(B), and 1036(a)(1)(B) of the CFPA. 12 U.S.C.

§§ 5531(c)(1), (d)(1), (d)(2)(B), 5536(a)(1)(B).

Section 1036(a)(1)(B) of the CFPA prohibits “abusive” acts or practices. 12 U.S.C. §

5536(a)(1)(B). An act or practice is abusive if it takes unreasonable advantage of the

consumer’s inability to protect his or her interests in selecting or using a consumer

financial product or service. 12 U.S.C. § 5531(d)(2)(B).

Withheld cash and points reward on credit cards: To compete with other credit card

companies, ( Insert Your Bank Here) targeted individuals with special offers of cash and

points when signing up for a credit card. ( Insert Your Bank Here) illegally withheld

promised credit card account bonuses, such as cash rewards or bonus points, to tens of

thousands of consumers. The bank failed to honor rewards promises for consumers who

submitted in-person or over-the-phone applications. The bank also denied sign-up

bonuses to consumers due to the failure of ( Insert Your Bank Here)’s business processes

and systems.

Misused Sensitive Customer Information to Open Unauthorized Accounts: in order

to reach now disbanded sales-based incentive goals and evaluation criteria, ( Insert Your

Bank Here) employees illegally applied for and enrolled consumers in credit card

accounts without consumers’ knowledge or authorization. In those cases, ( Insert Your

Bank Here) illegally used or obtained consumers’ credit reports, without their permission,

to complete applications. Because of ( Insert Your Bank Here)’s actions, consumers were
charged unjustified fees, suffered negative effects to their credit profiles, and had to

spend time correcting errors.

The Bureau has concluded that ( Insert Your Bank Here) acts or practices violated the

Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., and its implementing regulation,

Regulation Z, 12 C.F.R. part 1026; the Fair Credit Reporting Act

(FCRA), 15 U.S.C. §§ 1681b(f); and the Consumer Financial Protection Act of 2010

(CFPA), 12 U.S.C. §§ 5531 and 5536. The Bureau issues this Consent Order under §§

1053 and 1055 of the CFPA.

IT IS FURTHER ORDERED that: In the event of any default on ( Insert Your Bank

Here) obligations to make payment under this Consent Order, interest, computed under

28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the

date of default to the date of payment, and will immediately become due and payable.

Under 31 U.S.C. § 7701, ( Insert Your Bank Here) , unless it already has done so, must

furnish to the Bureau its taxpayer-identification numbers, which may be used for

purposes of collecting and reporting on any delinquent amount arising out of this Consent

Order.

( Insert Your Bank Here) must notify the Bureau of any development that may affect

compliance obligations arising under this Consent Order, including but not limited to a

dissolution, assignment, sale, merger, or other action that would result in the
emergence of a successor company; the creation or dissolution of a subsidiary, parent,

or affiliate that engages in any acts or practices subject to this Consent Order; the

filing of any bankruptcy or insolvency proceeding by or against ( Insert Your Bank Here)

; or a change in ( Insert Your Bank Here) name or address. ( Insert Your Bank Here)

must provide this notice, if practicable, at least 30 days before the development, but in

any case, no later than 14 days after the development.

(( Insert Your Bank Here) , as defined below) and determined that it has engaged in the

following acts and practices: (1) opened unauthorized deposit accounts for existing

customers and transferred funds to those accounts from their owners’ other accounts, all

without their customers’ knowledge or consent; (2) submitted applications for credit

cards in consumers’ names using consumers’ information without their knowledge or

consent; (3) enrolled consumers in online banking services that they did not request; and

(4) ordered and activated debit cards using consumers’ information without their

knowledge or consent. The Bureau has concluded that such acts violate §§ 1031 and

1036(a)(1)(B) of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§

5531 and 5536(a)(1)(B). Under §§ 1053 and 1055 of CFPA, 12 U.S.C. §§ 5563, 5565, the

Bureau issues this Consent Order (Consent Order).

The Bureau has jurisdiction over this matter under §§ 1053 and 1055 of the CFPA, 12

U.S.C. §§ 5563, 5565.