Atlantic Union Bank has been ordered by the Consumer Financial Protection Bureau (CFPB) to refund at least $5 million in illegal overdraft fees and pay a $1.2 million penalty to the CFPB’s victims relief fund. The action, announced on Thursday, December 7, 2023, comes after the CFPB found that the bank had illegally enrolled thousands of customers in checking account overdraft programs.
“Atlantic Union Bank harvested millions of dollars in overdraft fees through a host of illegal practices,” stated CFPB Director Rohit Chopra. He added, “Americans are fed up with junk fee scams and the CFPB will continue its work to ensure families are treated fairly.”
Atlantic Union Bank, a subsidiary of the Richmond, Virginia-based Atlantic Union Bankshares Corporation, had over $20 billion in total assets as of March 31, 2023.
The CFPB’s order details the bank’s illegal conduct, including how it improperly communicated with and enrolled consumers in its overdraft program. Key violations include charging fees without proper consent and misleading customers about the terms and costs of overdraft coverage.
Employees at Atlantic Union Bank branches were found to give oral descriptions of the bank’s overdraft coverage to new customers who opened checking accounts. They sought oral confirmation from customers to enroll in overdraft coverage before providing them with the required written disclosures describing the terms of service.
For customers who enrolled in overdraft coverage by phone, Atlantic Union Bank employees failed to clearly explain which transactions were covered by the service and made misleading statements about the service’s terms and conditions. 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.
Under the Consumer Financial Protection Act (CFPA), the CFPB has the authority to take action against institutions found to be violating consumer financial laws, including engaging in unfair, deceptive, or abusive acts or practices. The CFPB determined that Atlantic Union Bank violated the Electronic Fund Transfer Act’s opt-in requirements for overdraft services, and it found the bank engaged in deceptive acts or practices in violation of the CFPA.
The order requires Atlantic Union to end its unlawful practices, refund $5 million to thousands of affected consumers illegally charged overdraft fees, and pay a $1.2 million penalty to the CFPB’s victims relief fund.
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