On April 16, the OCC published a consent order it issued on April 2 against a federal savings association alleging the bank engaged in deceptive acts or practices in violation of Section 5 of the FTC Act in connection with VA cash-out refinance loans. According to the order, between at least 2022 and 2024, the bank sent consumers “millions of deceptive advertisements” stating consumers had “available funds” and directing them to contact the bank, when the advertisements were actually solicitations for VA cash-out refinance loans requiring new loans to access the funds. The order also alleges that certain bank employees made deceptive statements suggesting the bank maintained a special relationship with the VA. Additionally, the OCC alleged that the bank misrepresented loan terms by creating the impression that consumers would obtain more favorable loan terms, including lower interest rates or monthly payments, when in fact the loan terms and overall transaction costs did not provide the represented benefits, and in some cases, resulted in consumers incurring higher costs or less favorable terms.

Under the consent order, the bank must cease and desist from the identified violations, retain an independent third-party consultant to identify affected consumers and determine restitution amounts, pay restitution to such consumers, and submit quarterly compliance reports to the OCC. The bank consented to the order without admitting or denying the OCC’s allegations.