BIRMINGHAM, Ala. – A bank chain with a number of central Illinois locations has agreed to pay a huge fine after implementing what the feds called “surprise overdraft fees.”
The Consumer Financial Protection Bureau has ordered Regions Bank to pay $191 million in fines — $141 million of which will be refunded to bank customers.
The feds allege that from August 2018 until July of last year, Regions charged the alleged illegal overdraft fees on certain ATM withdrawals and debit card purchases.
The bureau claims bank officials knew about the fees and could have discontinued them years earlier.
“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,” said Rohit Chopra, CFPB Directror, in a news release. “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.”
For its part, an attorney for Regions says the bank is pleased to have resolved the matter, and that the bank is working to further reduce overdraft charges.
“The CFPB settlement involves one type of overdraft fee that was previously charged when there was sufficient 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,” Tara Plimpton, Regions Bank Chief Legal Officer, said, also in a news release. “Over a year ago, Regions stopped charging this particular overdraft fee. We took this action as part of a broader series of enhancements.”
Regions Bank has at least two local branches in East Peoria and Peoria.
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