OCC Orders The Federal Savings Bank to Correct Deceptive Loan Marketing

The Federal Savings Bank, a Chicago-based federal savings bank with about $1.1 billion in assets, specializes in cash-out refinancing loans guaranteed by the U.S. Department of Veterans Affairs (VA). The OCC found that its advertisements and employee representations violated Section 5 of the Federal Trade Commission Act, potentially leaving veterans with higher interest rates, monthly payments and origination fees without fully understanding the costs.

The OCC issued a consent order on April 2, 2026, and announced the enforcement action on April 16. From at least 2022 through 2024, the bank mailed millions of advertisements claiming that recipients had “available funds,” although accessing the money required a new VA cash-out refinance loan. The order requires the bank to stop the misleading practices, hire an independent consultant to identify affected customers and issue refunds. The civil penalty is $0, while the total restitution amount has yet to be determined.