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Fifth Third Bank, N.A.

On July 9, 2024, the Bureau issued an order against Fifth Third Bank, N.A. (Fifth Third), a national bank that, among other things, offers and services motor vehicle loans to consumers directly and through a variety of vehicle dealers. Typically, when borrowers obtained a loan from Fifth Third, borrowers signed agreements that required them to maintain insurance that would cover physical damage to the vehicle that served as collateral for the loan. If borrowers did not maintain that insurance coverage, Fifth Third could force-place physical-damage coverage on the vehicle, otherwise known as force-placed insurance. Over 50% of the policies Fifth Third force placed were charged to borrowers who had either always maintained their own insurance or obtained the requisite insurance within a 30-day timeframe of their prior policy lapsing. The Bureau found that Fifth Third’s placing duplicative and unnecessary force-placed insurance on motor vehicle loans; charging premiums for force-placed-insurance policies that had terminated; and failing to provide sufficient notice to consumers of increased monthly payments due to force-placed insurance was unfair in violation of the Consumer Financial Protection Act of 2010 (CFPA). Despite the high number of unnecessary and duplicative force-placed insurance policies and its deficient notice and cancellation processes, Fifth Third continued to force place insurance for years, demanding that consumers pay for insurance they did not need or else face delinquency, additional fees, and even repossession. From 2011 through 2019, Fifth Third force-placed or maintained unnecessary duplicative insurance over 37,000 times. The Bureau also found that Fifth Third made deceptive representations to borrowers about the time required to cancel force-placed-insurance policies and about the total amount due in right-to-cure letters, subjecting borrowers to delinquency-related fees. The Bureau further found that Fifth Third violated the Fair Credit Reporting Act by furnishing inaccurate information to consumer reporting agencies regarding repossessions. Finally, the Bureau found that Fifth Third failed to notify consumers of increases in the amounts of preauthorized electronic-fund transfers due to force-placed insurance, in violation of the Electronic Fund Transfer Act and Regulation E. The order requires Fifth Third to come into compliance with the law, pay redress, and pay a $5 million civil money penalty.

Consent Order

Stipulation

Press release

CFPB Takes Action Against Fifth Third for Wrongfully Triggering Auto Repossessions and Opening Fake Bank Accounts

Case docket

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