Regions Bank fined $191M for charging unlawful ‘surprise’ overdraft fees

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Regions Bank overdraft fees fine overview: 

• Who: The Consumer Financial Protection Bureau has hit Regions Bank with an order to pay a fine of $191 million. 
• Why: The bank illegally charged its customers overdraft fees on transactions that went through when customers had sufficient balances.
• Where: The Regions Bank fine is being issued by U.S. financial authorities.

Regions Bank has been fined $191 million by financial authorities for charging “surprise” overdraft fees on debit card transactions and ATM withdrawals. 

The Consumer Financial Protection Bureau (CFPB) announced the fine in a Sept. 28 consent order.

“The Bank committed unfair and abusive acts and practices when it charged overdraft fees on transactions that had a sufficient balance at the time the Bank authorized the transaction but then later settled with an insufficient balance,” the bureau wrote. 

The CFPB slammed the bank’s actions, stating that, from Aug. 2018 through July 2021, Regions Bank charged the fees, even though it knew government agencies had found those charges to be illegal. 

“From August 2018 through July 2021, Respondent generated at least $141 million in Authorized-Positive Overdraft Fees. These fees substantially harmed consumers,” the CFPB said.

Regions Bank must repay customers, and pay $50M penalty

During this time, Regions Bank was charging consumers overdraft fees for debit-card purchases and ATM withdrawals even when they had enough money in their accounts when they made those purchases or withdrawals, if the transaction later settled with insufficient funds.

“[Regions Bank] could have stopped charging these fees sooner, but instead the Bank continued to charge them for years while it pursued changes to generate alternative fee revenue that would fully offset its expected revenue loss from eventually eliminating the Authorized-Positive Overdraft Fees,” the CFPB said. 

“Ultimately, the Bank adopted revenue negative changes that included eliminating the Authorized-Positive Overdraft Fees in July 2021.”
As part of the consent order with the agency, the bank must refund the $141 million to affected customers and pay an additional $50 million civil penalty.

“Regions Bank raked in tens of millions of dollars in surprise overdraft fees every year, even after its own staff warned that the bank’s practices were illegal,” CFPB Director Rohit Chopra said in a statement.

“Too often, large financial firms make a calculation that continuing to break the law is more profitable than following it. We have more work to do to change this mentality,” Chopra said.

Regions Bank was also in the news in 2019 amid reports that homeowners who had paid off their FHA Regions Bank mortgage loans may have been unlawfully charged interest on their balances.

What do you think of this Regions Bank overdraft fees fine? Let us know your thoughts in the comments! 

Read About More Class Action Lawsuits & Class Action Settlements:

• Bank NSF fee charge class action lawsuit claim review
• Do credit unions charge overdraft fees?
• Indiana auto dealers document preparation fees $13.5M class action settlement
• Dollar Bank, GTE Financial Credit Union NSF and overdraft lawsuit investigation: Were you charged too much by a bank?