FDIC levies penalties against First California Bank
June 3, 2013
The Federal Deposit Insurance Corp. levied $1.7 million in penalties against First California Bank on Friday for misleading customers about prepaid card features and for charging fees that were not clearly disclosed.
The cards are part of a program First California Financial Group participated in to provide re-loadable cards to deliver federal benefits payments to its customers. The FDIC said First California Bank violated provisions of the Federal Trade Commission Act prohibiting “unfair and deceptive practices.”
Under a settlement agreement, the bank has agreed to pay $600,000 in civil money penalties and approximately $1.1 million in restitution to over 64,000 cardholders.
In December, PacWest Bancorp signed an agreement to purchase First California Financial Group for $231 million. First California runs 19 branches from San Luis Obispo down to San Diego and boasts $1.74 billion in assets.
PacWest’s proposed purchase of First California Bank is slated to result in the closure of one branch in San Luis Obispo and more banking sector job losses.