The Federal Deposit Insurance Corporation (FDIC) announced a settlement with World's Foremost Bank, Sidney, Nebraska (WFB), for alleged unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission Act as well as violations of the Truth in Lending Act in connection with WFB's credit card programs. Under the settlement, WFB has agreed to stipulate to a Consent Order, provide restitution of approximately $10.1 million to current and former cardholders; and pay a civil money penalty of $250,000.
The FDIC determined that WFB did not operate its credit card programs in an appropriate manner with regards to certain overlimit fees, credit line decreases, minimum payments due, late fees, penalty interest rates, notices to customers, and collection practices. The Consent Order, in part, requires WFB to correct the violations of law, develop appropriate policies and procedures to ensure future compliance, and effectively monitor third-party agreements and activities.
In agreeing to the issuance of the Consent Order, WFB does not admit nor deny any liability. A copy of the FDIC's Consent Order, Order to Pay Restitution and Order to Pay issued against WFB is attached.
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 7,657 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-53-2011