TCF Bank is facing allegations of deceptive overdraft practices and tricking customers so that the bank can benefit financially.

The Consumer Financial Protection Bureau is suing TCF Bank claiming that it intentionally misled customers during their application process so that they would agree to paying $35 per overdraft violation. These alleged deceptive overdraft practices are cause for a lawsuit, according to the CFPB.

TCF Bank is closely associated with the University of Minnesota and has a special partnership with the educational institution allowing students to connect their U Cards to a checking account.

The Consumer Financial Protection Bureau accuses TCF Bank of pushing customers to accept the service by adopting a “loose definition of consent.”

They say that TCF Bank intentionally tricked customers into believing that overdraft services were mandatory. These alleged deceptive overdraft practices also consisted of “emotionally charged hypotheticals” in order to persuade customers.

A 2010 federal rule states that customers must “opt in” to overdraft services and if a customer did not opt in, then those transactions that overdraw an account would be declined.

This situation gets a bit tricky because of the relationship that TCF Bank has with the University of Minnesota. The bank informed the University about the lawsuit but the University does not believe it will affect their affiliation with TCF Bank.

Brian Burnett, the Senior Vice President of Finance and Operations, said, “We’ve been very appreciative of the relationship the bank has with the U. We’ll just have to see how it plays out.“

The bank pays the University $37 for each U Card that is connected.

Unfortunately, college students are among the country’s most common users of overdraft protection. Additionally, college-sponsored banking arrangements may not always be the best for students. These arrangements often include steep fees, like the ones TCF Bank charges its customers for overdraft protection.

A study by the CFPB released in December found that of those students who had college-sponsored bank accounts, 10% incurred 10 or more overdrafts each year. This amounted to an average of nearly $200 in fees.

Critics believe that these overdraft fees are lining the pockets of banks at the expense of college students.

A spokesman for TCF bank claimed that the bank does not engage in deceptive overdraft practices and deals fairly with customers. He noted that this lawsuit wouldn’t affect any University students and that new customers opted-in to this program at a rate of 60 percent.

He said, “ We provide full and complete disclosure to all customers. Everyone is presented with a contract that provides all the information.”

However, before the federal rule was enforced, TCF Bank pulled in $182 million in overdraft fees each year.

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