Regions Bank was ordered to pay $191 million for surprise overdraft fees. File photo by wavebreakmedia/Shutterstock
Sept. 28 (UPI) -- The Consumer Financial Protection Bureau ordered Regions Bank to pay at least $191 million in penalties and refunds for charging customers "surprise" overdraft fees.
The bank must refund at least $141 million to customers and pay $50 million into the CFPB's victims relief fund, the CFPB said in a news release Wednesday.
According to the agency, from Aug. 2018 through July 2021, the bank charged overdraft fees even after telling customers they had sufficient funds at the time of the transactions.
That type of transaction is known as an authorized-positive fee and is imposed when there is money in an account when a debit card or ATM transaction was authorized -- but not when the transaction actually posted to the account, due to other transactions.
"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.
"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."
Regions said that it disagrees with the bureau's characterizations of the fees, but it cooperated with the investigation.
"Agreeing to the settlement reflects Regions' desire to focus its attention on continuing to support customers through a wide range of account enhancements that have already lowered fees for many customers," the bank said.