Atlantic Union settles overdraft case with CFPB for $6M

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The Consumer Financial Protection Bureau ordered Atlantic Union Bank to pay a $1.2 million fine and refund $5 million to thousands of consumers who the agency said were misled into enrolling in overdraft service without proper disclosures. 

The CFPB on Thursday said that $20.6 billion-asset Atlantic Union in Richmond, Virginia, failed to properly disclose its overdraft practices to roughly 8,500 consumers who enrolled by phone or in branches from 2017 to 2020. Atlantic Union, a subsidiary of Atlantic Union Bankshares Corp., disclosed in a February 2022 filing with the Securities and Exchange Commission that the CFPB was considering taking action regarding its overdraft practices. 

Atlantic Union said it chose to settle with the CFPB without admitting or denying wrongdoing.

"We respectfully disagree with the CFPB's conclusions about these historical practices and take very seriously our obligation to comply with applicable law," Atlantic Union's CEO John Asbury said in a statement. "We are, and have always been, committed to treating our customers fairly and providing them with the information they need to help them make financial decisions that work for their lives. Nonetheless, we believe it is in Atlantic Union's best interest to settle this matter so we can continue focusing on providing the products, services, and support our customers want."

The CFPB is expected this month to unveil a long-awaited rule on overdraft fees. CFPB Director Rohit Chopra has cracked down on banks charging customers overdraft and insufficient funds fees. This revenue at banks has fallen nearly 50% since 2019 to roughly $7.7 billion from $12 billion, according to the agency. 

"Atlantic Union Bank harvested millions of dollars in overdraft fees through a host of illegal practices," Chopra said in a press release. 

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The CFPB said that Atlantic Union charged overdraft fees without giving written disclosures to customers who opened checking accounts. The CFPB said the bank's employees failed to obtain affirmative consent and engaged in deceptive acts or practices when offering opt-in overdraft services to consumers who opened an account over the phone. In many cases, employees omitted telling customers about costs, terms and conditions of overdraft products in violation of the Electronic Fund Transfer Act and the Consumer Financial Protection Act, the CFPB said. 

Last year, Atlantic Union joined many banks in reducing or eliminating entirely certain overdraft fees. The bank said it now charges up to four overdraft fees per day to a single account, down from six. The CFPB said the bank currently charges a $38 overdraft fee but before 2020, Atlantic Union charged $36 for each overdraft and that customers could end up paying up to six such fees per day.