The Bancorp Bank

In July 2024, the CFPB issued a consent order penalizing Chime Financial $3.25M for illegal fee practices, specifically surprise overdraft fees charged to consumers on fintech deposit accounts. The underlying accounts were held at The Bancorp Bank and Stride Bank, both of which serve as Chime's sponsor bank partners. While the enforcement action directly targeted Chime as the fintech entity, it has significant implications for the sponsor banks involved, as it highlights the regulatory risk that banks assume when partnering with fintechs to offer consumer-facing deposit products. The action demonstrates the CFPB's willingness to pursue consumer harm through the fintech-bank partnership chain.

Verified from source: The CFPB issued a consent order against Chime Financial, Inc., which services consumer banking accounts for two FDIC-insured partner banks (including The Bancorp Bank), requiring a $3.25 million civil money penalty and at least $1.3 million in redress for unfairly failing to timely refund consumers' account balances upon closure. The action relates to Chime's partner bank accounts rather than directly naming The Bancorp Bank as the respondent.