American Express agreed on Wednesday to pay 960 million dollars to settle with federal regulators for charging higher interest rates and other discriminatory practices in Puerto Rico and other U.S. territories.
The Consumer Financial Protection Bureau (CFPB) took action against two American Express banking subsidiaries for discriminating against consumers in Puerto Rico, the U.S. Virgin Islands, and other U.S. territories by providing them with credit and charge card terms that were inferior to those available in the 50 states.
CFPB said more than 200,000 consumers were harmed by American Express' discriminatory practices, which included charging higher interest rates, imposing stricter credit cutoffs, and providing less debt forgiveness.
American Express has paid approximately 95 million U.S. dollars in consumer redress during the course of the Bureau's review. Besides, CFPB ordered Wednesday that the company has to pay at least another 1 million to fully compensate harmed consumers.
American Express said in a statement the discrepancy was discovered in an internal review and reported to the CFPB in 2013.
"They have ceased this practice and are making consumers whole. In particular, because they self-reported the problem and fully cooperated with our investigation, no civil penalties are being assessed in this matter," CFPB Director Richard Cordray said in the statement.