The CFPB fined the Birmingham, Ala., based Regions Bank $7.5 million for charging overdraft fees to customers who had not opted in and overdraft and insufficient funds fees on its deposit advance product even though it had said it would not.
The $119 billion bank has roughly 1700 branches and 2000 ATMs in 16 states, the agency said.
"Today the CFPB is taking its first enforcement action under the rules that protect consumers against illegal overdraft fees by their banks," CFPB Director Richard Cordray said.
"Regions Bank failed to ask consumers if they wanted overdraft service before charging them fees. In the end, hundreds of thousands of consumers paid at least $49 million in illegal charges. We take the issue of overdraft fees very seriously and will be vigilant about making sure that consumers receive the protections they deserve."
The deposit advance product allowed customers to borrow from the bank and repay the amount in the next pay period, the agency said.
The agency noted that not only had the bank charged customers overdraft fees who had not opted in for the overdraft service, it had also delayed fixing the problem for almost a year.
Regions Bank has already repaid consumers $49 million in improperly charged fees, CFPB added.
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