SUPERVISORY HIGHLIGHTS, ISSUE 29 (WINTER 2023)
4 SUPERVISORY HIGHLIGHTS, ISSUE 29 (WINTER 2023)
institutions are providing redress to over 170,000 consumers. Supervision found instances in
which institutions assessed unfair APSN overdraft fees using the consumer’s available balance
for fee decisioning, as well as unfair APSN overdraft fees using the consumer’s ledger balance for
fee decisioning. Consumers could not reasonably avoid the substantial injury, irrespective of
account-opening disclosures. As a result of examiner findings, the institutions were directed to
cease charging APSN overdraft fees and to conduct lookbacks and issue remediation to
consumers who were assessed these fees.
Supervision also issued matters requiring attention to correct problems that occurred when
institutions had enacted policies intended to eliminate APSN overdraft fees, but APSN fees were
still charged. Specifically, institutions attempted to prevent APSN overdraft fees by not
assessing overdraft fees on transactions which authorized positive, as long as the initial
authorization hold was still in effect at or shortly before the time of settlement. There were
some transactions, however, that settled outside this time period. Examiners found evidence of
inadequate compliance management systems where institutions failed to maintain records of
transactions sufficient to ensure overdraft fees would not be assessed, or failed to use some
other solution to not charge APSN overdraft fees. In response to these findings, the institutions
agreed to implement more effective solutions to avoid charging APSN overdraft fees and to issue
remediation to the affected consumers.
The Bureau has stated the legal violations surrounding APSN overdraft fees both generally and
in the context of specific public enforcement actions will result in hundreds of millions of dollars
of redress to consumers.
9
As discussed in a June 16, 2022 blog post, Supervision has also
engaged in a pilot program to collect detailed information about institutions’ overdraft practices,
including whether institutions charged APSN overdraft fees.
10
A number of banks that had
previously reported to Supervision engaging in APSN overdraft fee practices now report that
they will stop doing so. Institutions that have reported finalized remediation plans to
Supervision state their plans cover time periods starting in 2018 or 2019 up to the point they
ceased charging APSN overdraft fees.
9
See Consumer Financial Protection Circular 2022-06, Unanticipated Overdraft Fee Assessment
Practices (Oct. 26, 2022) available at:
https://files.consumerfinance.gov/f/documents/cfpb_
unanticipated-overdraft-fee-assessment-practices_circular_2022-10. pdf; CFPB Consent Order 2022-
CFPB-008, In the Matter of Regions Bank (Sept. 28, 2022), available at:
https://files.consumerfinance.gov/f/documents/cfpb_Regions_Bank-_Consent-Order_2022-09.pdf;
CFPB Consent Order 2022-CFPB-0011, In the Matter of Wells Fargo Bank, (Dec. 20, 2022), available at:
ht
tps://files.consumerfinance.gov/f/documents/cfpb_wells-fargo-na-2022_consent-order_2022-
12.pdf.
10
Measuring the impact of financial institution overdraft programs on consumers, (June 16, 2022),
available at:
https://www.consumerfinance.gov/about-us/blog/measuring-the-impact-of-financial-
institution-overdraft-programs-on-consumers/.