The Federal Reserve has approved Greenwood Village, Colo.-based National Bank Holdings Corp.'s pending acquisition of Peoples Inc.
However, the regulator also issued a consent order against Peoples' subsidiary, Peoples Bank. It claims that the Lawrence, Kan.-based bank, through its national mortgage business, deceived some borrowers into thinking additional payments for discount points would lower their interest rates, when their rates were not actually lowered. The national mortgage business is already being wound down, and Peoples has been ordered to refund impacted customers.
Approximately $2.8 million will be allotted for restitution.
The National Bank-Peoples deal has already received Peoples' shareholder approval.