News

CFPB Targets TCF And Overdraft Practices

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.

[bctt tweet=”TCF Financial may be in the crosshairs of legal action via the Consumer Financial Protection Bureau.”]

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.

To check out what else is HOT in the world of payments, click here.

——————————

PYMNTS LIVE ROUNDTABLE: TUESDAY, JULY 14, 2020 AT 12:00 PM (ET)

Digital transformation has been forcefully accelerated, but how does that agility translate into the fight against COVID-era attacks and sophisticated identity threats? As millions embrace online everything, preserving digital trust now falls mostly on banks and FIs. Now, advances in identity data and using different weights on the payment mix afford new opportunities to arm organizations and their customers against cyberthreats. From the latest in machine learning for fraud and risk, to corporate treasury teams working in new ways with new datasets, learn from experts how digital identity, together with advances like real-time payments, combine to engender trust and enrich relationships.

TRENDING RIGHT NOW