In October 2014, the CFPB ordered M&T Bank to refund $2.9 million to its customers for “deceptively marketing its checking accounts as free.” From 2009 to 2012, M&T Bank advertised free checking accounts, referred to as “‘no-strings-attached,'” “that required accountholders to maintain a minimum account activity — a requirement the bank didn’t note in the advertisements.” If the customer did not meet this financial requirement, the company “automatically switched to accounts that cost up to $14 a month,” which customers were not alerted to. The CFPB also imposed a $200,000 fine on M&T Bank.

• M&T Bank, a Buffalo, NY-based company with $90 billion in assets, “has grown dramatically in the Philadelphia region in recent years with the acquisition of Wilmington Trust Corp.” The bank noted that they “did disclose the minimum-activity requirement at the time a customer opened the account, even if it did not include the provision in the advertisements themselves.” [Chris Cumming, “CFPB Fines M&T $3.1M for Deceptively Promoting Free Checking”, American Banker, 10/10/14; Jeff Blumenthal, M&T refunds $2.9M to customers for false advertising, Philadelphia Business Journal, 10/10/14]

• “According to the consent order, from 2009 through 2012, M&T advertised ‘no-strings-attached’ free checking accounts that required accountholders to maintain a minimum account activity — a requirement the bank didn’t note in the advertisements.” The deceptive practice was noticed by a CFPB regulator who, during a routine exam, “discovered that the bank’s policy was to convert ‘Free Checking’ accounts to ‘M&T First’ accounts after 90 days of inactivity, but provided no notification of the changes apart from the ‘M&T First’ logo on account documents.” The switch from a “free” account to one that cost $14 a month occurred when the account balance dipped below $1,500. Roughly “80,000 customers had their accounts converted from free checking to the fee-based accounts, and of these about 59,000 were charged a total of $2.9 million in fees.” [Chris Cumming, “CFPB Fines M&T $3.1M for Deceptively Promoting Free Checking”, American Banker, 10/10/14]

• The CFPB “initially raised concerns about the advertisements more than two years ago,” to which M&T responded by “‘immediately changed our policies and procedures in response,’ said Darren King, M&T’s executive vice president for retail and business banking, in a statement.” [Chris Cumming, “CFPB Fines M&T $3.1M for Deceptively Promoting Free Checking”, American Banker, 10/10/14]

• M&T Bank did not confirm or deny any wrongdoing, but agreed to a consent order that instructed the bank “to refund $2.9 million to account holders and pay a $200,000 fine to the agency,” as well as “stop its deceptive advertising of the accounts and to revise the credit reports of any customer whose accounts were closed.” [Chris Cumming, “CFPB Fines M&T $3.1M for Deceptively Promoting Free Checking”, American Banker, 10/10/14]