By Pete Schroeder
WASHINGTON (Reuters) -The U.S. Consumer Financial Protection Bureau has ordered Regions Financial Corp (NYSE:RF) to pay $191 million in fines and refunds, after the regulator said the Birmingham, Alabama-based bank charged customers illegal overdraft fees for years.
From 2018 to 2021 Regions charged roughly $141 million in illegal fees, which will be refunded, the CFPB said in a statement on Wednesday. The bank will also pay a $50 million fine.
The bank did not admit or deny the CFPB's findings. In a statement, the bank said it was pleased to resolve the matter, and had stopped charging that fee over a year ago.
The CFPB said regulators have long discouraged banks from charging so-called "authorized positive" fees, which are fees a bank charges when a customer has enough funds at the time of a transaction, but ends up overdrawing their account when the transaction clears the following day due to other activity.
The agency said the bank could have scrapped the fee earlier, but while building an alternate fee structure, it kept in place "unintelligible and manipulative processes" that made it difficult for customers to know if they had enough funds to cover transactions. The CFPB order bans the bank from charging the fee going forward.
"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 in the statement. "Too often, large financial firms make a calculation that continuing to break the law is more profitable than following it."