U.S. consumer bureau orders Regions to pay $191 million for surprise overdraft fees

WASHINGTON, Sept 28 (Reuters) – The U.S. Client Monetary Safety Bureau has ordered Areas Monetary Corp (RF.N) to pay $191 million in fines and refunds, after the regulator stated the Birmingham, Alabama-based financial institution charged clients unlawful overdraft charges for years.

From 2018 to 2021 Areas charged roughly $141 million in unlawful charges, which might be refunded, the CFPB stated in a press release on Wednesday. The financial institution may also pay a $50 million superb.

The financial institution didn’t admit or deny the CFPB’s findings. In a press release, the financial institution stated it was happy to resolve the matter, and had stopped charging that price over a 12 months in the past.

The CFPB stated regulators have lengthy discouraged banks from charging so-called “approved constructive” charges, that are charges a financial institution costs when a buyer has sufficient funds on the time of a transaction, however finally ends up overdrawing their account when the transaction clears the next day as a result of different exercise.

The company stated the financial institution may have scrapped the price earlier, however whereas constructing an alternate price construction, it stored in place “unintelligible and manipulative processes” that made it tough for purchasers to know if they’d sufficient funds to cowl transactions. The CFPB order bans the financial institution from charging the price going ahead.

“Areas Financial institution raked in tens of tens of millions of {dollars} in shock overdraft charges yearly, even after its personal workers warned that the financial institution’s practices have been unlawful,” CFPB Director Rohit Chopra stated within the assertion. “Too usually, massive monetary corporations make a calculation that persevering with to interrupt the legislation is extra worthwhile than following it.”

Reporting by Pete Schroeder; Enhancing by Paul Simao and Chris Reese

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