Digital banking giant Chime will pay over $4.5 million to settle with the Consumer Financial Protection Bureau (CFPB) for unlawfully delaying consumer refunds.
Thousands of Chime users experienced delays spanning weeks or even months in receiving balance refunds after closing their accounts. The CFPB noted that these delays “inflicted significant financial harm,” forcing some affected individuals to resort to costly forms of credit to meet their financial obligations.
Chime attributed most delays to a “configuration error with a third-party vendor during 2020 and 2021.” As part of the settlement, Chime will pay at least $1.3 million in consumer redress and a $3.25 million penalty to the CFPB’s victims relief fund.
CFPB director Rohit Chopra emphasized, “Fast-growing financial firms must treat their customers fairly and understand that federal law is not a suggestion.”