Title: Chime to Pay $4.55 Million for Delayed Refunds, Says Biden Administration

The Biden administration has instructed online banking group Chime to pay a sum of $4.55 million due to its failure in providing timely refunds to customers who closed their accounts with the company. The Consumer Financial Protection Bureau (CFPB) made the announcement on Tuesday, stating that Chime must compensate affected consumers with a minimum of $1.3 million and pay a penalty of $3.25 million.

According to the CFPB, Chime persistently neglected to process refunds promptly for consumers who had closed their accounts with outstanding balances. This included numerous instances where Chime waited at least 90 days. As a result, customers were left waiting for weeks or even months to access their funds, forcing them to rely on alternative sources such as credit cards to cover essential expenses.

CFPB Director Rohit Chopra highlighted the hardship faced by Chime's customers, emphasizing that fast-growing financial firms must prioritize fair treatment of their customers and adhere to federal law. Chopra stated, "Chime's customers had to wait weeks or months for access to their own money and were forced to use alternative funds to cover their essential expenses."

The CFPB revealed that many of the affected customers were unable to meet their basic living expenses due to the delays in receiving their refunds. Although Chime uses a third-party payment processor to handle account payments, the CFPB holds Chime responsible for processing and ensuring the timely debiting of consumers' accounts, as well as managing consumer communications and account servicing.

Chime acknowledged that a "configuration error" with a third-party vendor in 2020 and 2021 was responsible for the majority of the delayed refunds. In response, Chime worked with the vendor to rectify the issue and issued refunds to impacted consumers. The company expressed its agreement with the CFPB's goal of fostering a competitive and accessible financial landscape and stated its commitment to timely customer service, even amidst the challenges posed by the pandemic.

The settlement agreement between Chime and the CFPB reflects the importance of handling customer matters promptly and has been reached to rectify the situation. Chime expressed its satisfaction in resolving the matter and stated its dedication to continuing its mission of providing a competitive and accessible financial environment.

In conclusion, Chime has been directed by the Biden administration to pay $4.55 million as a result of its failure to issue timely refunds to customers. The CFPB's announcement emphasized the significance of treating customers fairly and abiding by federal laws. Chime has acknowledged the error and has taken steps to resolve the issue, expressing their commitment to excellent customer service and supporting the CFPB's vision for an inclusive financial landscape.