Atlantic Union Bank to pay $6.2M for illegal overdraft fees

The CFPB issued a consent order against Atlantic Union Bank after a review of the bank's policies and practices relating to the enrollment of consumers into overdraft services and finding the following violations of law:

• failing to obtain consumers’ affirmative consent to enroll in Respondent’s opt-in overdraft service and subsequently charging those consumers overdraft fees pursuant to that service, in violation of the Electronic Fund Transfer Act (EFTA), 15 U.S.C. § 1693 et seq., and its implementing Regulation E, 12 C.F.R. § 1005.17(b)(1)(iii); and
• engaging in deceptive acts or practices while offering opt-in overdraft services to consumers over the phone, in violation of the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531(a), 5536(a)(1)(B).

According to the Order, the CFPB found that branch employees were not following the proper sequence for obtaining opt-ins for overdraft service on ATM and one-time debit card transactions as prescribed in Regulation E § 1005.17:

• Under Respondent’s branch enrollment procedures, Respondent’s branch employees orally present Opt-in ODP to new customers who are opening consumer-checking accounts and request those new customers to orally indicate whether they want to enroll following that presentation. Respondent’s branch employees then document the new customer’s oral enrollment preference in Respondent’s account-opening computer system.
• Under Respondent’s branch enrollment procedures, Respondent’s branch employees do not print the written overdraft notice for new customers until the end of the account-opening process. This form is entitled “What You Need to Know about Overdrafts,” which is AUB’s version of the Regulation E model consent form (the A-9 Form).
• The printed A-9 Form that Respondent’s branch employees present to new customers is populated with a checked box to reflect the customer’s oral enrollment preference from earlier in the account-opening process.
• Under Respondent’s branch procedures, through January 2019, new customers did not receive written disclosures about Respondent’s Opt-in ODP service before receiving the A-9 Form at the end of the account-opening process. From January 2019 to November 2020, new customers received some, but still inadequate written disclosures about Respondent’s Opt-in ODP service before receiving the A-9 Form at the end of the account-opening process.
• Respondent’s branch employees present this printed A-9 Form together with Respondent’s account-opening authorization form. New customers that opt in to Opt-in ODP are required to sign both forms to complete the account-opening process.

The CFPB also found that when customers with existing checking accounts could enroll in Opt-in ODP by phone, but, because customer service representatives were not provided a script to be read to customers about the fees and features of Opt-in ODP before enrolling, the bank's representatives often did not clearly distinguish the transactions covered by Standard vs Opt-in ODP or specify for customers which transactions were covered by the opt-in election, and the bank's employees made a variety of misleading statements in some of the phone calls (see items 26 - 27 on page 11 of the Order), constituting deceptive acts or practices and violations of § 1005.17 of Regulation E.