Cole Taylor Bank has been fined $4.1 million over its handling of checking accounts for college students.
The Rosemont-based bank was fined $3.5 million Tuesday over dealings with Higher One, which processed financial aid and issued debit cards to college students. The Federal Reserve Board penalty was in line with what parent company Taylor Capital Group Inc. predicted in May.
Cole Taylor was also fined $600,000 by the Illinois Department of Financial and Professional Regulation.
“It is unconscionable for any company to seek profit by misleading customers about the terms of their financial accounts,” said Manuel Flores, acting secretary of the IDFPR said in a prepared statement. “Too many students and their families end up with a massive burden of education debt, so it is especially important to protect students from deceptive practices. I’m gratified by our efforts to protect these students’ finances by holding a bank accountable for its unlawful business conduct.”
The Federal Reserve Board said Higher One and Cole Taylor misled students and omitted important information about how students could get financial aid refunds and related fees.
Cole Taylor’s consent order requires it to assume liability if Higher One is ordered to but unable to pay restitution.
