The Federal Deposit Insurance Corporation has settled charges under Section 5 of the Federal Trade Commission Act that a South Dakota bank charged unfair or deceptive credit card overlimit fees.

Through a Consent Order and Order to Pay announced January 29, 2010, the FDIC requires 1st Financial Bank USA to discontinue its practice of assessing a second overlimit fee on the first day of a billing cycle when a cardholder was charged an overlimit fee for exceeding the credit limit on the last day of the prior cycle. It also requires 1st Financial to pay approximately $10 million in restitution and a $140,000 civil money penalty.

In 2008, much attention was sparked by the FDIC decision to bring Section 5 charges against CompuCredit and several bank issuers of subprime cards marketed or serviced by CompuCredit. In 2009, the FDIC brought Section 5 charges against American Express Centurion Bank and Advanta Bank Corp. relating to their credit card practices. So far, the FDIC has primarily used its Section 5 authority in the credit card arena. This latest action shows that the FDIC remains willing to flex its muscles under Section 5 of the FTC Act when it sees acts and practices it finds unfair or deceptive