The Consumer Financial Protection Bureau (CFPB) has mandated Atlantic Union Bank to pay $6.2 million for illicitly accumulating overdraft fees. The bank was found guilty of improperly enrolling customers into paying these fees.
In a press release by the CFPB, it was clarified that the Consumer Financial Protection Act (CFPA) empowers the CFPB to take action against any institution violating consumer financial laws. This includes deceptive practices towards consumers. Atlantic Union has been ordered to cease its unlawful practices, pay a fine of $1.2 million, and refund $5 million to customers affected by the illegally imposed overdraft fees. As of March 31, 2023, Atlantic Union holds over $20 billion in total assets.
"Atlantic Union Bank harvested millions of dollars in overdraft fees through a host of illegal practices," stated 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." He further noted that the Electronic Fund Transfer Act necessitates banks to clearly outline their overdraft service in writing before obtaining a consumer's consent for overdraft coverages when withdrawing funds from ATMs.
According to the same press release, employees at Atlantic Union Bank branches provided oral descriptions of the bank's overdraft coverage to new customers. By seeking verbal confirmation for enrolling in overdraft coverages prior to issuing written disclosures, the company was participating in illegal conduct. Customers who enrolled in overdraft coverage over the phone were not given clear instructions about which transactions were covered by the service provided. Additionally, misleading statements about the terms and conditions of the service were made to customers over the phone. In some instances, bank employees concealed crucial information about the cost of service and potential hefty overdraft fees. The CFPB is committed to penalizing companies that engage in unlawful overdraft practices and has offered guidance on the illegal use of junk fees to consumers and companies.
