RICHMOND, Va.— The Consumer Financial Protection Bureau (CFPB) has ordered refunds be paid to customers of Atlantic Union Bank, following allegations the bank “illegally enrolled” thousands of customers in checking account overdraft programs.
The CFPB said it found Atlantic Union misled consumers who enrolled in the overdraft service by phone and failed to provide proper disclosures. The CFPB has ordered Atlantic Union to refund at least $5 million in illegal overdraft fees and pay a $1.2 million penalty to the CFPB’s victims relief fund.
Atlantic Union Bank (NYSE: AUB) is a subsidiary of Atlantic Union Bankshares Corp., a bank holding company headquartered in Richmond, Virginia. As of March 31, 2023, Atlantic Union had over $20 billion in total assets, according to the CFPB.
The Fees
Through Aug. 3, 2020, the bank had been charging a $36 OD fee for each item paid, with a maximum of six fees per day. That later rose to $38 per fee, with a maximum of four such fees per day for items over $5.
The Bureau noted the Electronic Fund Transfer Act and its implementing regulation require banks to describe their overdraft service in writing before getting a consumer to opt-in to overdraft coverage for ATM withdrawals and one-time debit card transactions.
The Specifics
According to the CFPB, the bank violated federal law by:
- Charging fees without proper consent: “At Atlantic Union Bank branches, employees gave oral descriptions of the bank’s overdraft coverage to new customers who opened checking accounts. Employees sought oral confirmation from customers to enroll in overdraft coverage before providing them with the required written disclosures describing the terms of service.”
- Misleading 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. In some calls, bank employees also omitted key information about the cost of the service and the fact that consumers could incur a hefty overdraft fee for each transaction covered by the service.”
Enforcement Action
The order requires Atlantic Union to end its unlawful practices and:
- Refund $5 million to thousands of consumers: The bank must pay at least $5 million in redress to thousands of affected consumers illegally charged overdraft fees.
- Pay a $1.2 million fine: Atlantic Union will pay a $1.2 million penalty to the CFPB’s victims relief fund.
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