The Consumer Financial Protection Bureau (CFPB) ordered Atlantic Union Bank to pay $6.2 million for illegally enrolling thousands of customers in checking account overdraft programs.
The regulator found the bank misled customers who enrolled in the overdraft service by phone and failed to provide proper disclosures.
Atlantic Union will pay a civil penalty of $1.2 million and will refund at least $5 million in fees to impacted customers as part of a settlement to end an investigation by the CFPB into certain practices employed by the bank between 2017 and 2020 relating to its Opt-In Overdraft Privilege service.
The bank does not admit to any wrongdoing, past or present, under the terms of the settlement.
It stated it had proactively made improvements to its overdraft program before the settlement, including to the Opt-In Overdraft Privilege service.
The Electronic Fund Transfer Act requires banks to describe their overdraft service in writing before consumers can opt-in to overdraft coverage for ATM withdrawals and one-time debit card transactions.
The CFPB stated the bank violated federal law by charging fees after only seeking oral consent from customers to enroll in overdraft coverage before providing them with the required written disclosures describing the terms of service.
It also noted the bank misled customers about the terms and costs of overdraft coverage: for customers who enrolled in overdraft coverage by phone, Atlantic Union Bank employees did not clearly explain which transactions were covered by the service, and made other misleading statements about the terms and conditions of the service.
Rohit Chopra, CFPB president, said: “Atlantic Union Bank harvested millions of dollars in overdraft fees through a host of illegal practices. Americans are fed up with junk fee scams and the CFPB will continue its work to ensure families are treated fairly.”
John Asbury, CEO of Atlantic Union, said: “We respectfully disagree with the CFPB’s conclusions about these historical practices and take very seriously our obligation to comply with applicable law. We are, and have always been, committed to treating our customers fairly and providing them with the information they need to help them make financial decisions that work for their lives.
“Nonetheless, we believe it is in Atlantic Union’s best interest to settle this matter so we can continue focusing on providing the products, services, and support our customers want.”
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