The Consumer Financial Protection Bureau fined Atlantic Union Bank $6.2 million for allegedly illegally enrolling thousands of customers in checking account overdraft programs.
According to the CFPB, the Richmond, Va.-based bank violated the Electronic Fund Transfer Act by not describing its overdraft service in writing before securing consumer buy-in for overdraft protection on one-time debit card transactions and ATM withdrawals.
According to the CFPB, Atlantic Union employees didn’t clearly explain which transactions were covered by the program, failed to disclose crucial overdraft cost information and didn’t tell consumers that they could incur a costly overdraft fee for each transaction covered by the program. The violations reportedly took place from 2017-20.
“Employees gave oral descriptions of the bank’s overdraft coverage to new customers who opened checking accounts,” the CFPB stated. “Employees sought oral confirmation from customers to enroll in overdraft coverage before providing them with the required written disclosures describing the terms of service.”
The CFPB ordered the $20 billion Atlantic Union to refund at least $5 million in illegal overdraft fees and pay $1.2 million in penalties to the CFPB’s victims relief fund. “Atlantic Union Bank harvested millions of dollars in overdraft fees through a host of illegal practices,” said CFPB Director Rohit Chopra. “Americans are fed up with junk fee scams and the CFPB will continue its work to ensure families are treated fairly.”
Atlantic Union did not admit to wrongdoing under the settlement agreement. CEO John Asbury said the bank disagreed with the CFPB’s findings. Last year, the bank eliminated consumer account fees for items returned unpaid due to insufficient funds; reduced the number of overdraft fees that can be charged per day to one account; and unveiled a “no-overdraft” checking product.
“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,” Asbury added. “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.”