Community Trust Bancorp (CTBI) in Pikeville, Ky., faces sanctions from the Federal Reserve Board over its assessment of overdraft fees.
The $3.6 billion-asset company disclosed in a regulatory filing Friday that the Fed had determined that "certain aspects" of the overdraft assessment process violate a section of Federal Trade Commission Act barring unfair and deceptive trade practices.
The Fed informed Community Trust that it must modify its process for assessing overdraft fees, revise its disclosures and provide restitution to accountholders who were charged certain fees since June 28, 2010. The company said it will recognize an accrual against earnings during the fourth quarter, though it is still early to outline the amount.
Community Trust said in the filing that it could face further sanctions from the Fed, which could include limitations on acquisition activity, settlements, fines, orders or injunctions. The company first disclosed the Fed inquiry last month.