Cole Taylor Bank expects to be fined up to $3.6 million over its handling of checking accounts for college students.
The parent company of Cole Taylor “believes that it is probable” the Federal Trade Commission will fine the bank over its dealings with Higher One, which processed financial aid and issued debit cards to college students, Rosemont-based Taylor Capital Group Inc. disclosed Wednesday in a filing with the Securities and Exchange Commission.
Higher One and its partner banks came under scrutiny over fees and overdraft charges associated with the accounts.
The Federal Reserve Bank of Chicago previously concluded the bank “engaged in a deceptive practice relating to the checking account opening process.” Taylor Capital said it met with Federal Reserve representatives on May 9 and 12 about the likely penalty.
Taylor Capital said the bank might also be ordered to make restitution to affected college students, an amount it didn’t estimate. While Higher One would be expected to reimburse Cole Taylor for the cost of restitution, it was unclear whether Higher One would have the money to do that.
In July 2013, MB Financial announced it was buying Cole Taylor for about $680 million.