The Consumer Financial Protection Bureau (CFPB) has ordered Regions Bank to pay $191 million for what it calls “illegal, surprise overdraft fees.” The order requires Regions Bank to pay $50 million into the CFPB’s victim relief fund and to refund at least $141 million to customers harmed by these overdraft fees.
According to the order, from August 2018 to July 2021, Regions Bank charged customers surprise overdraft fees even after the consumers were told they had sufficient finds at the time of a transaction. The CFPB also found Regions leadership knew about and could have discontinued its surprise overdraft fee practices years earlier, but they chose to wait while Regions pursued changes that would generate new fee revenue to make up for ending the illegal fees.
“Regions Bank raked in tens of millions of dollars in surprise overdraft fees every year, even after its own staff warned that the bank’s practices were illegal,” CFPB Director Rohit Chopra said. “Too often, large financial firms make a calculation that continuing to break the law is more profitable than following it. We have more work to do to change this mentality.”
This is the second time Regions Bank has been charged with illegal overdraft fee activity by the CFPB. In 2015, the CFPB ordered Regions Bank to refund $49 million to consumers for charging overdraft fees to consumers who had not opted into overdraft protection and to consumers who had been told they would not be charged overdraft fees.
Besides the fees ordered by the CFPB, Regions Bank will be banned from charging authorized-positive fees.