Atlantic Union has 109 branches and keeps its headquarters in downtown Richmond.
Richmond’s biggest bank was hit Thursday by an enforcement action and fines from the Consumer Financial Protection Bureau.
The federal agency announced that Atlantic Union Bank has agreed to pay $1.5 million in penalties and repay at least $5 million to affected customers to settle charges that it illegally enrolled thousands in checking account overdraft programs without proper disclosures.
“Atlantic Union Bank harvested millions of dollars in overdraft fees through a host of illegal practices,” CFPB Director Rohit Chopra said in a prepared statement.
The agency claimed that AUB misled around 8,500 customers when enrolling them in the bank’s Opt-In Overdraft Privilege service and charging them overdraft fees from 2017 to 2020. The CFPB said it found AUB violated provisions of the Electronic Fund Transfer Act and the Consumer Financial Protection Act of 2010.
In its own announcement on Thursday, AUB emphasized that it “does not admit to any wrongdoing, past or present,” as part of the settlement.
John Asbury
“We respectfully disagree with the CFPB’s conclusions about these historical practices and take very seriously our obligation to comply with applicable law,” AUB CEO John Asbury said in a press release. “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.”
Asbury added that the bank chose to settle the matter to “continue focusing on providing the products, services, and support our customers want.”
The bank declined to comment beyond the press release.
According to a 35-page consent order issued by the agency, the issues relate to disclosures and enrollment procedures the bank used when signing customers up for the overdraft program by phone or in its branches during the three-year period.
Part of the Electronic Fund Transfer Act requires a bank to obtain a consumer’s consent and provide written notice before placing them in a program that involves overdraft fees on ATM and debit card transactions.
It said the bank also did not provide its customer service representatives a script to read over the phone to customers about the fees in question.
Click the image to read the CFPB consent order.
“In some calls, Respondent’s employees also omitted key information about the cost of Opt-in ODP and the fact that consumers could incur a $36 or $38 overdraft fee for each transaction covered by Respondent,” the consent order states.
AUB, in its press release, said it already has made changes to parts of its overdraft practices.
“Well before (Thursday’s) settlement, Atlantic Union proactively made improvements to its overdraft program, including to the Opt-In Overdraft Privilege service at issue in the settlement,” Asbury said in the press release. “In 2022, Atlantic Union also reduced or eliminated certain overdraft-related fees to help reduce the burden of such fees on customers. Among other changes, it eliminated fees on consumer accounts for items returned unpaid due to insufficient funds; reduced the number of overdraft fees that can be charged per day to a single account; and introduced a “no-overdraft” checking product.”
As part of the consent order, AUB must within 30 days send a letter to all affected customers informing them of their opt-in status. The bank must also obtain a new enrollment decision from those customers before charging any new overdraft fees.
Also within 30 days of the order, the bank must implement a compliance plan to ensure it adheres to the applicable laws going forward.
The order states that AUB’s board of directors has the ultimate responsibility for ensuring the bank’s compliance.
Within 10 days of the order the bank must set aside in a segregated account no less than $5 million for restitution or “redress fees” for the affected customers.
It must also wire the $1.2 million penalty to the CFPB within those 10 days. The CFPB said the money will be deposited into its Civil Penalty Fund.
The consent order was effective on Dec. 6 and announced Thursday.
At $20 billion in total assets, AUB is the largest bank headquartered in the Richmond region. It’s headquartered downtown in the James Center and its branch footprint spans 109 branches across Virginia.
The CFPB matter comes as the bank is in the midst of acquiring American National Bank out of Danville. The deal is expected to close next year. It will add $3 billion in assets to AUB’s base and help expand its presence into American National’s territory in Southwest and Southside Virginia, as well as in North Carolina in Greensboro, Winston-Salem, High Point and Raleigh.
AUB also earlier this year sold 25 of its branches to a real estate investment group in a leaseback deal for $45.8 million.
In its most recent third quarter earnings report, AUB turned a profit of $51 million, compared to $55 million in the same period a year ago.
Atlantic Union has 109 branches and keeps its headquarters in downtown Richmond.
Richmond’s biggest bank was hit Thursday by an enforcement action and fines from the Consumer Financial Protection Bureau.
The federal agency announced that Atlantic Union Bank has agreed to pay $1.5 million in penalties and repay at least $5 million to affected customers to settle charges that it illegally enrolled thousands in checking account overdraft programs without proper disclosures.
“Atlantic Union Bank harvested millions of dollars in overdraft fees through a host of illegal practices,” CFPB Director Rohit Chopra said in a prepared statement.
The agency claimed that AUB misled around 8,500 customers when enrolling them in the bank’s Opt-In Overdraft Privilege service and charging them overdraft fees from 2017 to 2020. The CFPB said it found AUB violated provisions of the Electronic Fund Transfer Act and the Consumer Financial Protection Act of 2010.
In its own announcement on Thursday, AUB emphasized that it “does not admit to any wrongdoing, past or present,” as part of the settlement.
John Asbury
“We respectfully disagree with the CFPB’s conclusions about these historical practices and take very seriously our obligation to comply with applicable law,” AUB CEO John Asbury said in a press release. “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.”
Asbury added that the bank chose to settle the matter to “continue focusing on providing the products, services, and support our customers want.”
The bank declined to comment beyond the press release.
According to a 35-page consent order issued by the agency, the issues relate to disclosures and enrollment procedures the bank used when signing customers up for the overdraft program by phone or in its branches during the three-year period.
Part of the Electronic Fund Transfer Act requires a bank to obtain a consumer’s consent and provide written notice before placing them in a program that involves overdraft fees on ATM and debit card transactions.
It said the bank also did not provide its customer service representatives a script to read over the phone to customers about the fees in question.
Click the image to read the CFPB consent order.
“In some calls, Respondent’s employees also omitted key information about the cost of Opt-in ODP and the fact that consumers could incur a $36 or $38 overdraft fee for each transaction covered by Respondent,” the consent order states.
AUB, in its press release, said it already has made changes to parts of its overdraft practices.
“Well before (Thursday’s) settlement, Atlantic Union proactively made improvements to its overdraft program, including to the Opt-In Overdraft Privilege service at issue in the settlement,” Asbury said in the press release. “In 2022, Atlantic Union also reduced or eliminated certain overdraft-related fees to help reduce the burden of such fees on customers. Among other changes, it eliminated fees on consumer accounts for items returned unpaid due to insufficient funds; reduced the number of overdraft fees that can be charged per day to a single account; and introduced a “no-overdraft” checking product.”
As part of the consent order, AUB must within 30 days send a letter to all affected customers informing them of their opt-in status. The bank must also obtain a new enrollment decision from those customers before charging any new overdraft fees.
Also within 30 days of the order, the bank must implement a compliance plan to ensure it adheres to the applicable laws going forward.
The order states that AUB’s board of directors has the ultimate responsibility for ensuring the bank’s compliance.
Within 10 days of the order the bank must set aside in a segregated account no less than $5 million for restitution or “redress fees” for the affected customers.
It must also wire the $1.2 million penalty to the CFPB within those 10 days. The CFPB said the money will be deposited into its Civil Penalty Fund.
The consent order was effective on Dec. 6 and announced Thursday.
At $20 billion in total assets, AUB is the largest bank headquartered in the Richmond region. It’s headquartered downtown in the James Center and its branch footprint spans 109 branches across Virginia.
The CFPB matter comes as the bank is in the midst of acquiring American National Bank out of Danville. The deal is expected to close next year. It will add $3 billion in assets to AUB’s base and help expand its presence into American National’s territory in Southwest and Southside Virginia, as well as in North Carolina in Greensboro, Winston-Salem, High Point and Raleigh.
AUB also earlier this year sold 25 of its branches to a real estate investment group in a leaseback deal for $45.8 million.
In its most recent third quarter earnings report, AUB turned a profit of $51 million, compared to $55 million in the same period a year ago.
I miss the free Ukrops chocolate pies I used to earn when it was First Market. Bring back the pies!