The banks' parent, the $2.5 billion-asset West Coast Bancorp, said in a Securities and Exchange Commission filing Monday that the FDIC has found its overdraft program to be in violation of Section 5 of the Federal Trade Commission Act, which bans companies from engaging in unfair or deceptive practices.
Without admitting or denying the charges, West Coast has agreed to correct all violations and review its program to ensure it complies with FDIC guidelines within 60 days. Under the written agreement signed with the regulator on Oct, 11, West Coast's board is required to "participate fully" in the oversight of the bank's compliance management system and undergo educational training that specifically address consumer protection laws.
The company also has agreed to pay a civil money penalty of $390,000 and establish a $350,000 fund that would be used to repay customers who were charged at least one overdraft fee at automated teller machines or point-of-sale terminals between July 1, 2010 and Dec. 20, 2010.
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