WASHINGTON - The Las Vegas-based First National Bank of Marin has agreed to refund at least $4 million to customers who were issued credit cards that had little or no available credit, the Office of the Comptroller of the Currency said Tuesday.
The agency accused the $202 million-asset bank of conducting the illegal and risky practice of using "false and misleading statements to induce consumers to apply to its credit card and to pay substantial fees."
In a "fact sheet" accompanying a 19-page consent order, the OCC cited the bank - which specializes in lending to people with poor or no credit histories - for seven deceptive practices.
As part of the consent order, First National Bank of Marin agreed to establish a reserve fund by Dec. 13 with a $4 million initial deposit to refund the application and other fees to consumers who received a credit card with less than $50 of available credit and cancelled it within 60 days after it was issued.
The bank also agreed to change its marketing techniques and disclosure statements and establish a formal mechanism to evaluate customer complaints and the legality of its marketing material.
The regulatory action came three years after First National Bank of Marin moved from California to Nevada. At that time of the November 1998 relocation, Jonathan Maffei, its then-president and chief executive officer, said the bank was drawn to Nevada by its "more pro-credit-card environment."
He also complained about California's cap on delinquency and over-limit fees.
