Photo by James Sanna | Banker & Tradesman staff/file

The Consumer Financial Protection Bureau filed a complaint against Citizens Bank in the U.S. District Court in Rhode Island, prompting a rebuttal from the Providence-based bank.

The CPFB alleges that Citizens Bank violated the Truth in Lending Act by failing to properly manage and respond to credit card disputes. After the CFPB filed the complaint, Citizens responded in statement challenging the CFPB’s action, which the bank said was legally unwarranted and included “demands far out of line with actual customer impact.”

“We are puzzled and disappointed by the CFPB’s stance with respect to these long-resolved issues. Citizens fully addressed these matters within months of self-identifying, self-reporting and voluntarily remediating them more than four years ago,” Stephen T. Gannon, general counsel of Citizens, said in the statement. “The CFPB’s demands are wholly disproportionate to the issues at hand, and we strongly believe that the Bureau’s claims are unwarranted on both the facts and the law. We intend to vigorously contest the CFPB’s claims and are highly confident in the merits of our position.”

The complaint filed on Jan. 30 alleges that Citizens automatically denied consumers’ billing error notices and claims of unauthorized use in certain circumstances. The complaint further alleges that Citizens failed to fully refund finance charges and fees when consumers asserted meritorious disputes or fraud claims, and failed to send consumers required acknowledgement letters and denial notices in response to billing error notices.

The CFPB also alleged that Citizens violated TILA and Regulation Z by failing to provide credit counseling referrals to consumers who called Citizens’ toll-free number designated for that purpose. The CFPB complaint seeks, civil penalties among other remedies.

In its response to the complaint, Citizens said the action was misguided because the bank self-identified and escalated these issues following an end-to-end review of its operations, which it began in the first quarter 2015.

“The CFPB’s filing against Citizens, nearly five years later, ignores the swift, corrective actions that Citizens took,” the statement read. “The CFPB itself has previously described the kind of approach taken by Citizens to address these issues as “responsible conduct.” Following its subsequent examinations, the Bureau has indicated through its ratings that it is satisfied with the bank’s controls over its card operations, supporting the Citizens’ position that it has long removed any need for regulatory intervention.”

Citizens also said it exceeded all obligations to make customers whole and voluntarily paid approximately $750,000 in remediation to a broader set of customers than required by applicable rules.

“The CFPB is ignoring its own standards for ‘responsible conduct’ by pursuing this matter after Citizens met all requirements for remediating the issues,” the statement read. “Moreover, because the CFPB waited until well after Citizens corrected these issues to come forward, all of its claims fall outside of the one-year statute of limitations that governs claims under the Truth In Lending Act and Regulation Z.”

“We are proud of our commitment to transparency, our vigorous compliance programs, and our consistent effort to treat customers fairly and be a responsible company. We have received positive assessments of this program from all who have examined it, including the CFPB,” Gannon said in the statement.