On November 7, 2024, the CFPB announced that it had entered into a consent order with a major credit union resolving allegations that the credit union improperly assessed overdraft fees against consumers. The credit union agreed to pay nearly $95 million to resolve the allegations.
In its consent order, the CFPB alleged that the credit union committed unfair acts or practices in violation of Sections 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531(a) and (c)(1), and 5536(a)(1)(B), by 1) charging consumers overdraft fees for transactions where the consumer had a positive available account balance at the time that the transaction was authorized, but had a negative account balance at the time the transaction was settled by the credit union; and 2) charging consumers overdraft fees where the consumer made a transaction after receiving money from a person-to-person payment service (such as Zelle or CashApp) which was reflected in their available balance, but that money had not yet posted in their account at the time of the transaction (due to a 10 AM cutoff for funds to post on the same day of receipt). The CFPB alleged that these practices misled and confused consumers who did not reasonably expect to incur overdraft fees in either scenario.
Under the consent order, the credit union agreed to pay $80.7 million in redress to customers in addition to a $15 million civil penalty.
The post CFPB Enters Into $95 Million Consent Order with Credit Union to Resolve Allegations of Improper Overdraft Fee Practices appeared first on Consumer Finance Insights (CFI).