Chime Financial to pay $4.55M for untimely refunds

On May 7, 2024, the Bureau issued an order against Chime Financial, Inc. (Chime), a financial-technology company that designed and services consumer banking accounts for two separate FDIC-insured “partner banks.” Chime is responsible for most customer service on the consumer accounts. When consumers’ checking and savings accounts are closed, in most instances, Chime automatically refunds remaining balances (over $1) by check.

The Bureau found that Chime failed to refund consumers’ balances within 14 days in thousands of instances, including thousands of instances when Chime failed to issue consumer refunds within 90 days. Consumers who do not have access to funds in their bank accounts often are unable to pay for basic living expenses, like groceries, gas, and housing. To meet these needs, consumers likely have to use or search for alternate sources of funds, such as credit cards and payday loans, which can be expensive. The Bureau found that Chime’s conduct was unfair in violation of the Consumer Financial Protection Act of 2010. The order requires Chime to come into compliance, pay a $3.25 million civil money penalty, and pay at least $1.3 million in redress to consumers.