On Friday, the Consumer Financial Protection Bureau (CPB) ordered Atlantic Union Bank to pay $6.2 million for its part in an illegal overdraft fee harvesting action.
The CFPB said it found that Atlantic Union misled consumers by illegally enrolling thousands of customers into a checking account overdraft program, enrolling them by phone and failing to provide them with the proper disclosures. The agency ordered Atlantic Union to refund at least $5 million in overdraft fees and pay a $1.2 million penalty which will go to the CFPB’s victim’s relief fund.
“Atlantic Union Bank harvested millions of dollars in overdraft fees through a host of illegal practices,” CFPB Director Rohit Chopra said. “Americans are fed up with junk fee scams and the CFPB will continue its work to ensure families are treated fairly.”
A subsidiary of Atlantic Union Bancshares Corporation in Richmond, Virginia, Atlantic Union Bank has more than $20 billion in total assets as of March 31, 2023.
CFPB said the Electronic Fund Transfer Act requires banks to describe their overdraft service in writing before a customer can opt-in to overdraft coverage for ATM withdrawals and one-time debit card transactions. According to the CFPB, the bank’s employees gave customers oral descriptions of the overdraft coverage when they opened checking accounts and sought oral confirmation from customers before providing them with the required written disclosures. Additionally, the agency said, when customers enrolled over the phone, the bank’s employees did not clearly explain which transactions were covered by the service and made misleading statements about the terms and conditions of the service. In some calls, bank employees omitted key information about the service’s costs or that customers could incur heavy fees for each transaction.