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Protecting a Bank’s Reputation From a Regulatory Challenge

Following heightened regulatory scrutiny of account-opening practices across the banking sector, a large financial institution faced allegations from the Consumer Financial Protection Bureau (“CFPB”) and separately by the U.S. Department of Justice (“DOJ”) related to potential unauthorized account activity. FTI Consulting was engaged by counsel to analyze account data at scale and support the bank’s response to regulatory inquiries.

Our Impact

FTI Consulting conclusively demonstrated that the bank did not engage in systemic practices that harmed consumers.
Ultimately, we identified only a handful of accounts (less than 0.0007% of the total population analyzed) that were potentially subject to some form of remediation — all of which were unrelated to the bank’s systemic practices.
Our experts effectively presented our methodology and findings to the CFPB and DOJ, resulting in a successful settlement with the CFPB and no further action from the DOJ.
We safeguarded the client’s reputation and reinforced consumer confidence in the bank during a high-profile inquiry.

Our Role

Working with the bank’s outside counsel, we applied a data-driven approach in reviewing consumer accounts to identify accounts exhibiting characteristics indicative of potential unauthorized openings.
Our team conducted more than 60 targeted tests to identify accounts with indicators of potential unauthorized activity. These tests analyzed customer information provided during the application process; attributes related to the channel and banker responsible for account openings; and patterns in transactional, fee and rewards activity.
We analyzed more than 40 million consumer accounts from a 10-year period, identifying approximately 2,000 for potential remediation through a layered clustering methodology that integrated results across multiple tests.