In Re: Atlantic Union Bank
Date: Dec. 7, 2023
Issue: Atlantic Union Bank’s consent order with the Consumer Financial Protection Bureau (CFPB) over allegations it illegally enrolled customers in checking account overdraft programs.
Case Summary: Atlantic Union Bank agreed to pay $6.2 million to resolve CFPB allegations that it illegally enrolled customers in checking account overdraft programs.
Under Regulation E of the Electronic Fund Transfer Act (EFTA), a financial institution may not charge covered overdraft fees unless it first “obtains the consumer’s affirmative consent or opt-in to the institutions’ payment of ATM or one-time debit card transactions.” Further, a financial institution must provide a consumer with the written or electronic notice before it can obtain a user’s affirmative consent.
CFPB alleged that Atlantic Union Bank violated the EFTA because its employees gave oral descriptions of the bank’s overdraft coverage to new customers who opened checking accounts. Atlantic Union allegedly sought oral confirmation from customers to enroll in overdraft coverage before providing them with the required written disclosures describing the terms of service.
CFPB also alleged that Atlantic Union violated the Consumer Financial Protection Act (CFPA). According to CFPB, Atlantic Union did not provide its customer service representatives with a script to read to customers about the fees and features of opt-in overdraft privilege (ODP). CFPB claimed Atlantic Union employees made various misleading statements in certain calls with consumers. These statements allegedly included telling consumers opting in would provide them with emergency funds when needed with no other context about the costs of the service; consumers could avoid returned-item fees by opting in, even though such fees do not apply to ATM and one-time debit card transactions; and opting in would cover debit card transactions and checks, even though checks were already covered by standard ODP. Additionally, CFPB claimed Atlantic Union employees omitted key information about the cost of opt-in ODP, and that consumers could incur a $36 or $38 overdraft fee for each transaction. CFPB emphasized that the alleged misrepresentations and omissions constituted deceptive acts or practices in violation of CFPA.
To resolve the CFPB’s claims, Atlantic Union agreed to refund $5 million to affected consumers. Atlantic Union will also pay $1.2 million to the CFPB’s victim relief fund. Atlantic Union also agreed to create and implement a comprehensive compliance plan designed to ensure that the bank’s policies and practices related to enrolling consumers in opt-in ODP comp with all applicable laws.
Bottom Line: Atlantic Union Bank did not admit to or deny CFPB’s allegations.
Documents: Consent Order