Bank to refund $5M to customers, pay $1.2M fine
Robyn Sidersky //December 7, 2023//
Bank to refund $5M to customers, pay $1.2M fine
Robyn Sidersky// December 7, 2023//
The Consumer Financial Protection Bureau fined Richmond-based Atlantic Union Bank on Thursday for illegally enrolling thousands of customers in checking account overdraft programs, according to a news release.
The enrollments took place between 2017 and 2020, according to the bank. The bureau found that Atlantic Union, a subsidiary of Atlantic Union Bankshares, misled consumers who enrolled in the overdraft service by phone and failed to provide proper disclosures.
The CFPB is ordering 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 harvested millions of dollars in overdraft fees through a host of illegal practices,” CFPB Director Rohit Chopra said in a statement Thursday. “Americans are fed up with junk fee scams, and the CFPB will continue its work to ensure families are treated fairly.”
The bureau outlined two ways it says the bank violated federal law: charging fees without proper consent and misleading customers about the terms and costs of overdraft coverage.
The bank does not admit any wrongdoing under the settlement.
“We respectfully disagree with the CFPB’s conclusions about these historical practices and take very seriously our obligation to comply with applicable law,” Atlantic Union CEO John Asbury said in a statement. “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. 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.”
Atlantic Union said, in its own release, that before Thursday’s settlement, it proactively made improvements to its overdraft program.
“In 2022, Atlantic Union also reduced or eliminated certain overdraft-related fees to help reduce the burden of such fees on customers. Among other changes, it eliminated fees on consumer accounts for items returned unpaid due to insufficient funds; reduced the number of overdraft fees that can be charged per day to a single account; and introduced a ‘no-overdraft’ checking product,” the bank said in a news release.
Atlantic Union Bank had 109 branches in Virginia, Maryland and North Carolina as of the end of September, and it had more than $20 billion in total assets as of March 31.
-