tl;dr
New York's Attorney General Letitia James penalizes Pathward Bank for freezing customers' accounts and transferring funds to debt collectors. An investigation found the bank illegally sent tens of thousands of dollars to debt collectors and froze accounts over 1,400 times, violating the state's Exem...
New York's Attorney General Letitia James has penalized Pathward Bank for freezing customers' accounts and transferring funds to debt collectors. An investigation found that the bank illegally sent tens of thousands of dollars to debt collectors and froze accounts over 1,400 times, violating the state's Exempt Income Protection Act. Pathward has agreed to pay $79,664 plus interest to affected New Yorkers, as well as a $627,000 penalty. The bank cooperated with the investigation and began remediation last year. Pathward Financial has $6.868 billion in assets as of March 2023.
New York AG Letitia James announces refunds for New Yorkers affected by Pathward's illegal actions. The investigation by the Office of the Attorney General found that South Dakota-based Pathward Bank illegally sent debt collectors tens of thousands of dollars from New Yorkers’ accounts and froze hundreds of clients’ accounts more than 1,400 times. Pathward's illegal actions deprived New Yorkers of their hard-earned wages and critical government benefits, violating the state’s Exempt Income Protection Act, which bans banks from freezing accounts that include certain government benefits. The bank has agreed to pay $79,664 plus interest to around 88 affected New Yorkers and a penalty of $627,000. Pathward Financial had $6.868 billion in assets as of March 2023.
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