Regions Bank to Refund Overdraft Fees Worth $141 Million

Regions Bank is taking a major step towards making things right with their customers. They're refunding over $141 million in overdraft fees.

This massive refund is a result of a class-action lawsuit that claimed the bank was unfairly charging customers for overdraft fees. The lawsuit alleged that the bank was processing transactions in a way that maximized the number of overdraft fees, rather than prioritizing the most important transactions.

The bank has agreed to refund the fees to affected customers, and it's estimated that over 7 million customers will receive a refund.

For your interest: Class Action Lawsuit Regions Bank

Regions Bank will refund $141 million to customers for charging illegal overdraft fees.

This is not the first time Regions has been fined for its overdraft fee practices. In 2015, the bureau ordered Regions to refund $49 million and pay a $7.5 million penalty for charging overdraft fees.

Regions was charging overdraft fees on some ATM withdrawals as well as some debit card purchases, even after the bank told customers they had enough funds in their account to cover the transactions.

The Consumer Financial Protection Bureau found that Regions' executives knew the error in their systems was occurring, but held off making adjustments to their practices until the bank could find ways to replace the revenues lost from the fees.

Overdraft and non-sufficient funds fees were roughly 18% of the bank's non-interest income in 2019.

Regions stopped charging this particular overdraft fee over a year ago, as part of a broader series of enhancements to update the bank's posting order and transaction processing.

Regions took additional steps this year to further reduce overdraft charges while eliminating other fees.

Regions Bank is refunding a total of $141 million to customers for charging illegal overdraft fees. This refund is part of a settlement with the government.

The bank is also paying an additional $50 million in fines. This is a significant penalty for Regions Bank.

Customers who were charged overdraft fees between 2018 and 2021 will receive refunds. The fees were charged on some ATM withdrawals and debit card purchases.

Regions Bank executives knew about the error in their systems but waited to make changes until they could find ways to replace the lost revenue. This is a disturbing practice that prioritizes profits over fairness.

The bank stopped charging this particular overdraft fee over a year ago as part of a broader series of enhancements.

Regions Bank has been fined multiple times for its overdraft fee practices, with the most recent fine being $49 million in 2015, which included a $7.5 million penalty.

Consumers pay at least $29 billion annually in what the CFPB describes as excessive overdraft charges.

The average fee for overdrawing an account during the pandemic was $33.58, according to Bankrate, and big U.S. banks generate about $9 billion annually in revenue from overdraft, ATM, and other fees.

Regions Bank has agreed to refund $141 million to customers for charging illegal overdraft fees. This is not the first time the bank has been fined for its overdraft fee practices, as it was also ordered to refund $49 million and pay a $7.5 million penalty in 2015.

The bank charged overdraft fees on some ATM withdrawals and debit card purchases, even after telling customers they had enough funds in their account to cover the transactions. This was found to be an error in the bank's systems that executives knew about but continued to allow until they could find a way to replace the lost revenue.

Regions Bank stopped charging this particular overdraft fee over a year ago as part of a broader series of enhancements. The bank's posting order and transaction processing were updated to give customers a clearer view of the money they have available for making purchases while avoiding fees.

The Consumer Financial Protection Bureau found that overdraft and non-sufficient funds fees were roughly 18% of the bank's non-interest income in 2019. Regions Bank's leadership knew about the error in their systems for many years but held off making adjustments until they could find ways to replace the lost revenue.

Regions Bank has been fined multiple times for its overdraft fee practices, including a $49 million refund and $7.5 million penalty in 2015.

The Consumer Financial Protection Bureau (CFPB) has taken a strong stance against onerous overdraft fees, particularly under President Biden's leadership.

Consumers pay at least $29 billion annually in excessive charges, according to the CFPB.

During the pandemic, the average overdraft fee was $33.58, a staggering amount that adds up quickly.

Big U.S. banks, including Regions, have generated around $9 billion annually in revenue from overdraft, ATM, and other fees in recent years.