On August 20, 2020, the Consumer Financial Protection Bureau (CFPB) announced it had a reached a settlement with a national bank, resolving allegations that its overdraft services violated the Electronic Fund Transfer Act, 15 U.S.C. § 1693 et seq., 12 C.F.R. § 1005.17(b)(1)(iii) (EFTA), Regulation E, 2 C.F.R. § 1005.17(b)(1)(iii), and the Consumer Financial Protection Act, 12 U.S.C. §§ 5531(d)(1), 5536(a)(1)(B). Specifically, the CFPB alleged that the bank charged consumers overdraft fees for ATM and one-time debit card transactions without consumers’ affirmative consent, and deceptively told consumers that its overdraft services were a “free” benefit that came with new consumer-checking accounts, when the bank actually charged customers $35 for each overdraft transaction.
The consent order requires the bank to provide approximately $97 million in restitution to about 1.42 million consumers, and to pay a $25 million civil money penalty to the CFPB.
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