American Banker reported Thursday (Nov. 5) that TCF Financial may be in the crosshairs of legal action via the Consumer Financial Protection Bureau, centered on overdraft fees.
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In a regulatory filing, TCF, which has $20 billion in assets, said that it had gotten a letter from the CFPB that the bureau was examining the “opt-in” processes that are tied to checking account-related overdraft fees. The inquiry relates to what the bureau said are tied to “compliance with laws relating to unfair, deceptive and abusive acts and practices.” The financial enterprise said that it is preparing a written response to the inquiry advising why a formal action by the CFPB should not be pursued.
The company is no stranger to legal disputes. TCF, as American Banker noted, filed a lawsuit five years ago against the Federal Reserve Board with the goal of short-circuiting interchange fees on debit cards. The lawsuit was dropped several months later, as the Fed adopted its rules on those fees.
As reported recently, a study conducted by the research firm Compass Point projected that TCF could be “hit hard” by overdraft rules that are in the midst of being drafted by the CFPB.
Earlier this year, the CFPB issued its first enforcement against a bank for illegal overdraft fees. The target of that enforcement was Regions Bank, which is based in Alabama. The firm was cited for not taking the proper steps in asking customers if they wanted to enroll in overdraft services before being charged for those services. The bank wound up refunding $49 million to its customers and also paying a $7.5 million fine tied to regulatory violations over several years.
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