Nebraska News Desk

Regions Bank fined $7.5M for overdraft fees

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Regions Bank fined $7.5M for overdraft fees

Regions Bank will pay a $7.5 million fine for improperly charging overdraft fees to hundreds of thousands of customers, a federal regulator said Tuesday. The Alabama-based bank with branches and ATMs in 16 states charged the fees to customers who had not opted-in for overdraft coverage, even though such charges are not allowed, the Consumer Financial Protection Bureau said.

Additionally, Regions charged overdraft and non-sufficient funds fees on the bank’s deposit advance product, despite claims that it would not impose those charges, the CFPB said. The bank has refunded approximately $49 million of the improper fees, the regulator said. A CFPB consent order requires Regions Bank to make full refunds to all remaining customers affected by the improper overdrafts and pay the $7.5 million fine.

“Regions Bank failed to ask customers if they wanted overdraft service before charging them the fees. In the end, hundreds of thousands of consumers paid at least $49 million in illegal charges,” said CFPB Director Richard Cordray in a statement as the regulator announced its first enforcement action under rules that safeguard consumers against improper overdrafts. The bank did not immediately respond to a message seeking comment on the enforcement action.

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