of whether consumers expected or understood they were charged a new $ 35 fee each time it returned the same transaction . However , within its consent order the OCC concluded the bank had engaged in a deceptive practice because its deposit agreements and disclosures , as well as its schedule of fees , collectively referred to as disclosures , contained materially misleading representations and omissions regarding related fees . Specifically , the OCC stated :
“ The disclosures did not inform customers that they may be charged additional fees when a merchant resubmitted a transaction for payment . Rather , the bank ’ s disclosures explained consumers could be assessed an overdraft or insufficient funds fee of “$ 35 [ for ] each item .” The disclosures defined an “ item ” in a way that could have led a reasonable customer to think an “ item ” and a “ transaction ” were the same thing . And , the disclosure did not clearly state that a merchant could resubmit a declined transaction for payment . As such , a reasonable customer was likely to be misled that a transaction would only be subject to a single overdraft or insufficient funds fee .”
Both the CFPB and OCC consent orders confirmed Bank of America has already waived , refunded or has agreed to refund tens of millions of dollars to customers to whom it charged multiple re-presentment fees since September 2018 . Specifically , the CFPB ’ s consent order requires the bank to provide consumers with restitution for all unreimbursed re-presentment non-sufficient funds ( NSF ) fees , providing no less than $ 80.4 million in total redress to consumers .
The consent orders against Bank of America are by far some of the most noteworthy enforcement actions in 2023 , against a financial institution related to overdraft fees . However , it is important to highlight this is not the first time regulatory agencies , like the CFPB , have provided strict enforcement of previous guidance , cautioning against overdraft fee practices and fees it considers to be junk or unnecessary . As you may recall in our previous newsletters , the CFPB launched an initiative to curb junk fees in January 2022 . Since that time , it has issued a $ 191 million consent order against Regions Bank in September 2022 , for a practice stemming from its assessment of fees for authorized-positive , settlenegative ( APSN ) transactions . Prior to the initiative , the
CFPB also issued a $ 7.5 million order against Regions Bank in 2015 , and two separate orders each for $ 122 million and $ 30 million , respectively , against TD Bank and TCF Bank in 2020 and 2018 . Each of these enforcement actions were cited due to similar claims of unfair and / or deceptive overdraft practices .
Unlike the OCC or the Federal Deposit Insurance Corporation ( FDIC ) guidance , the CFPB has not explicitly declared charging multiple re-presentment fees is unlawful and unfair , deceptive and / or abusive . However , the agency , along with other regulators like the OCC and FDIC , has issued guidance to indicate charging ASPN transactions can be considered an unfair act or practice under the CFPA and Section 5 of the FTC Act . Consistent with this belief and other concerns surrounding junk fees like the one described above , the CFPB and other regulatory agencies continue to couple findings raised in the various informal guidance , regulations and supervisory highlights issued in recent years with consent orders and costly civil money penalties and restitutions .
Misleading Credit Card Reward Advertisements and Programs
Like the first two consent orders against Bank of America , the second consent order issued by the CFPB also concerned deceptive acts or practices the CFPB found to be in direct violation of the CFPA . This order was targeted at specific practices connected to the institution ’ s promotion of reward credit cards . The order also addressed an alarming trend in the bank ’ s accountopening practices .
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