b'CFPB Files Suit Against Fifth Third Bank ConcerningBank is alleged to have mishandled consumers billing Unauthorized Accounts error notices and unauthorized account claims by failing In another unauthorized account action, the CFPB filedto refund finance charges and fees when it resolved a lawsuit against Fifth Third Bank, N.A. (Fifth Third) inthese claims in consumers favor. Finally, the CFPB March alleging that the bank engaged in unfair andalleged that the bank failed to provide credit counseling abusive acts and practices under the CFPA when itreferrals to consumers who called the banks toll-free allegedly opened unauthorized accounts and enrolledcredit counseling referral number. In addition to consumers in products and services without theirinjunctive relief, the CFPB is also seeking restitution, knowledge or consent. From 2008 through at least 2016,consumer refunds, and civil money penalties. This case the CFPB alleged that Fifth Third employees openedremains pending in the District of Rhode Island. deposit and credit-card accounts in consumers names without their consent, transferred funds from consumers existing accounts to these new, unauthorized accounts,Looking Ahead to 2021enrolled consumers in unauthorized online-bankingIn 2021, now that Wells Fargo has entered settlements services, and activated unauthorized lines of creditsresolving allegations concerning its account-opening on consumers accounts. Fifth Third denies thesepractices with all the major federal and state players, allegations and maintains that its compensationwe expect to see a smaller total recovery in credit and and employee incentive structure does not rewarddebit card enforcement actions. To date, there is no employees for opening unauthorized accounts and thatindication that federal or state regulators have alleged it has controls in place designed to prevent and detectthat institutions other than Wells Fargo and Fifth Third unauthorized account openings. This case remainshave engaged in similar conduct, though it is possible pending in the Southern District of Ohio. that additional account-opening investigations will CFPB Settles with T.D. Bank Over Alleged EFTAcome to light. Violations for $122 Million The Biden administration has not taken a firm policy In August, the CFPB announced that it reached aposition on credit card reform, but regulating debit and $122 million settlement with TD Bank, N.A. (T.D. Bank),prepaid card overdraft fees was a focus for the Obama resolving allegations that the companys overdraftadministration. For example, in 2009, the Federal services violated the Electronic Fund Transfer ActReserve Board announced a rule prohibiting financial (EFTA) and CFPA by charging overdraft fees forinstitutions from charging overdraft fees without first ATM and one-time debit card transactions withoutproviding disclosures and receiving consumer consent. consumers affirmative consent. The CFPB also allegedWe anticipate that the Biden administration may renew that T.D. Bank deceptively told consumers that itsthis focus, particularly given the continued litigation on overdraft services were a free benefit that cameoverdraft fees. This may include, for example, measures with new consumer checking accounts, while actuallyto lower the amount of overdraft fees, preventing banks charging customers $35 for each overdraft transaction.from charging more than one overdraft fee per day, Under the consent order, T.D. Bank is required torequiring banks waive overdraft fees if a consumer provide approximately $97 million in restitution to aboutwas waiting for a deposit to clear, and requiring banks 1.42 million consumers, and to pay a $25 million civilto process transactions in a way that would minimize money penalty to the CFPB.overdraft fees. Lenders should watch for new guidance that signals renewed regulatory attention in this area.CFPB Files Action Against Citizens Bank, N.A. over Its Credit Card Program We also anticipate that the CFPBs relaxed approach In January, the CFPB filed a complaint against Citizensregarding Regulation Z enforcement during the Bank, N.A. (Citizens Bank) alleging that the bankpandemic might not comport with the priorities of a violated TILA and the CFPA through its servicing ofBiden-led CFPB, particularly as the COVID-19 crisis credit cards. According to the CFPB, the bank failed towanes in 2021, and so banks should not count on this reasonably investigate and appropriately resolve billingflexibility for much longer. error notices and consumers claims of unauthorized use. Specifically, Citizens Bank is alleged to haveWhat to Watchautomatically denied billing error claims or claims of unauthorized use if consumers failed to sign fraudNew guidance regarding overdraft fees.affidavits. These affidavits required consumers to sign under the penalty of perjury and with a provisionRollback of CFPB-enacted measures relaxingagreeing to testify as witnesses. Additionally, Citizensregulatory requirements due to COVID-19. 31'