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A Colorado Springs-based credit union and a Colorado bank that have been embroiled in a merger must repay millions of dollars to customers who have been overcharged on certain loans, according to a statement from Colorado Attorney General Phil Weiser on Monday.
Air Academy Federal Credit Union and Compass Bank – now part of BBVA and soon to become PNC (NYSE: PNC) – are due to reimburse auto loan customers who have purchased “secured auto protection” add-ons to a car loan. If the vehicle is destroyed, coverage reimburses the difference between what the insurance will pay, the fair market value, and the loan balance.
If the loan is repaid sooner or if the car is repossessed, financial institutions must repay any “unearned (protection) payments,†according to Colorado law.
Compass has agreed to reimburse more than $ 1.68 million to consumers in Colorado.
Pittsburgh-based PNC will complete the buyout of Houston-based BBVA by November after finalizing the $ 11.6 million cash deal.
PNC now has more than $ 560 billion in assets and can serve retail and commercial clients in 29 of the country’s 30 largest markets, according to a press release.
Air Academy “is currently working to determine what it owes customers, which involves a manual review of loan files that could take several months,” according to the Weiser statement.
According to an emailed statement from the company on Monday, “BBVA USA is pleased to have resolved the Guaranteed Automobile Protection (GAP) case with the Attorney General’s office. We look forward to continuing our efforts to serve Colorado residents with the full range of their banking needs. “
“We are committed to protecting hardworking Coloradans, especially from the unfair, deceptive and illegal practices that cause them stress, hardship and financial loss,” Weiser said in a statement.
“I am happy that this money is being returned to Colorado residents and the military who paid GAP when they purchased a vehicle. We will continue to require compliance from Colorado credit institutions to protect all consumers. “
Earlier this year, the department secured more than $ 9.5 million in reimbursements for Colorado consumers from Wells Fargo for non-return of unused GAP fees and $ 121,983 from American Assurance Corporation related to GAP coverage overbills, the statement said.
Air Academy calls and emails on Monday were not returned as of this story’s publication.
Borrowers who feel they need to repay their fees because they paid off a car loan early or did not receive full compensation for coverage should contact the Attorney General’s Consumer Credit Unit. at uccc@coag.gov.
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