Citizens reached the settlement with the Consumer Financial Protection Bureau (CFPB), the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC).
The bank will now be required to refund $11m to consumers and to pay $7.5m penalty for the violations to the CFPB. The bank will also need to pay a civil penalty worth $3m and a $3m refund to business account holders. Another $10m penalty needs to be paid to the OCC.
The CFPB said that investigations had revealed discrepancies in the amount of deposits being scanned on customer’s deposit slips. It was found that the amount of the slips was lesser than the amount of check and cash being deposited.
CFPB director Richard Cordray was quoted by the Wall Street Journal as saying: "When a depository institution violates the basic tenet of what it means to offer a deposit account — that is, to receive and keep safe the customer’s funds — it imbues a deep sense of mistrust.
"When consumers deposited their money into Citizens Bank, they trusted that all of their money would go into their accounts. But our investigation found that Citizens regularly denied some customers the full credits of their deposits."
The company said in a statement: "As we continue to improve our performance as a company, we are pleased to have resolved this matter from an earlier era. We strive to do our best for our customers every day and to do right by customers when issues like this come to light.
"We are now working with our regulators to make appropriate redress as quickly as possible. As previously disclosed, we have adequate reserves to cover the redress and fines."
