VA bank to pay ‘no less than’ $5 million in consumer redress, $1.2 million fine for illegal overdraft practices

Illegal overdraft practices are at the center of a consent order announced Thursday that requires Atlanta Union Bank (AUB), a subsidiary of Atlantic Union Bankshares Corporation (Richmond, Va.), to pay $5 million in redress to consumers and a $1.2 million civil money penalty.

The Consumer Financial Protection Bureau (CFPB), in a release, said the $20 billion-in-assets bank violated Regulation E, which implements the Electronic Fund Transfer Act (EFTA); and the Consumer Financial Protection Act (CFPA). Summarizing its order, the bureau said:

  • AUB violated Regulation E because, as part of its in-branch, checking account-opening process, its employees requested that new customers orally provide their enrollment decision before providing them with an adequate written notice describing the overdraft service.
  • It engaged in unlawful deception in violation of the CFPA by misleading consumers who called in by phone and enrolled in its Opt-In Overdraft Privilege (ODP) service. It said the bank misrepresented which transactions the service covered and omitted material information about the terms and conditions of the service.
  • The bank’s actions with respect to consumers who called and opted in by phone also violated Regulation E.

The order requires AUB to stop its unlawful conduct and “to pay no less than $5 million in redress to affected consumers and a penalty of $1.2 million,” the agency said. According to the order, affected consumers include those who:

  • opened a consumer checking account in person, at one of AUB’s branches, between Jan. 1, 2017, through Nov. 30, 2020, and enrolled in Opt-in ODP at account-opening; or
  • enrolled in Opt-in ODP by phone between Jan. 1, 2017, through Feb. 7, 2020.

CFPB Orders Atlantic Union Bank to Pay $6.2 Million for Illegal Overdraft Fee Harvesting