A small bank in New Jersey that was renowned for issuing cards to people who did not have a great credit history has now stopped taking newer requests due to certain problems in regulations.
The New Millenium Bank, operating out of New Brunswick and with three branches to its credit, announced its quarterly earnings on Monday. During this meeting, the bank also reported that they have put a stop to accepting new applications and processing the ones on their desk at the moment. As per an agreement with the Federal Deposit Insurance Corp, the bank has stopped issuing new cards. Before this announcement was made, the bank had extensively advertised on a number of credit card websites on the internet and had issued cards to people from various parts of the country.
In a press release, New Millenium Bank said "Certain concerns were raised by the bank's regulators regarding its consumer disclosure and compliance program in its credit card programs."
Neither did the bank did not elaborate on the compliance issues that were not in place nor did they give any response to further queries.
Though the bank had to cough up a fine of $25000 in the month of March for violating the Home Mortgage Disclosure Act, there was no formal action taken against the bank. A spokesperson mentioned that the credit card regulations are enforced by the agency on the banks that come under its purview.
The cards of New Millenium Bank are advertised extensively on websites alongside the various offers they have in store for their customers. A survey conducted on these sites post this announcement, now shows a pop up in place of the advertisement. The pop up either mentions that the credit cards are not available or that they are being reviewed.
There is no mention of any credit card on the website owned by the bank. This website only offers access to accounts that are currently held by their customers.
New Millenium bank was among the handful of banks that offered credit cards to people with poor credit history. However, these were secure credit cards aimed at helping a person repair a tarnished credit report. The credit limit on the card was dependent on the deposit made by the customer upfront. For example, the limit on the card would be $1000 if the customer paid up an initial deposit of $1000.
While it certainly aimed at helping people, the fees on this card were exorbitant. The processing and application fees were so high that it ate into the credit limit offered to the consumer.