Regions Bank Fined $7.5 Million for Overdraft Fees

The Consumer Financial Protection Bureau will be collecting more than $7.5 million in fines alone from Regions Financial Corporation. These fines were imposed for overdraft fees charged to consumers who had not agreed to a service, which would transfer money to protect in the case of a shortfall. Regions Financial refunded $49 million to customers who erroneously received NSF fees. In short, the bank neglected to ask consumers whether they wanted overdraft protection prior to charging them fees in violation of the Federal Podd-Frank Act.. The director of the Consumer Financial Protection Bureau stated the agency takes overdraft fees seriously and believe consumers should be protected from outrageous banking fees.

Following the 2008 crisis when many banks had to have government bail-out money, rules were put into place which stopped banks from collecting overdraft fees unless consumers opted in. Regions failed to apply the new rules, continuing to charge their customers as much as $36 per transaction for overdrafts. Even though Regions has more than $120 billion in assets, the bank continued charging consumers overdraft fees from nearly a year after the violation was brought to light. Regions Financial has more than 1,700 branches spread across 16 states in the South, Midwest and Texas. The fines assessed to Regions Financial would likely have been larger if the bank had not voluntarily refunded money to their customers.

Other Banks Fined for Overdraft Fees

Across the United States, consumers paid a staggering $32 billion in overdraft fees in 2014 alone, despite the new regulations. The fines and actions against Regions Financial Corporation are believed to be the first of many in a quest to curb the fees banks currently charge consumers. More than half of all banking customers say they have no recollection of opting in to the bank overdraft fees. Nearly 70 percent said they would rather than their debit card declined than to be stuck with a $35 overdraft fee, sometimes for an item which cost less than $10. Bank overdraft fees account for a full three-fourths of checking account fees. A California jury entered a verdict of $203 million several years ago against Wells Fargo as a result of resequencing the order of transactions in order to collect excessive overdraft fees. The consumer protection lawyers at Golomb Legal have been at the forefront of this litigation. While serving in the leadership of the national multi-district litigation since 2010, consumers have been able to recover over $1 billion as a result of this behavior.

All Bank Fees on the Rise

Additionally, it was discovered that sixty percent of the major banks piled on even more fees when the overdraft fees weren’t paid within a few days. Bank of America added $35 after five days and Sun Trust added $36 after seven days. Banks are now required to obtain advance consent from the depositor to cover overdrafts for debit-card purchases, but can still collect overdraft fees for checks and recurring payments. ATM fees as well as fees simply for the privilege of having a checking account have also continued to rise with no relief in sight for consumers. If you want to avoid the majority of banking fees, consider opening an account with a local credit union and giving large banks the heave-ho.

Contact Our National Consumer Protection Lawyers

The national consumer protection lawyers at Golomb Legal have successfully represented individuals in Philadelphia, Pennsylvania, New Jersey, and throughout the United States.