TCF National Bank has agreed to pay $30 million to resolve allegations that it misled consumers about overdraft services. TCF National Bank will pay $25 million in restitution to consumers who were charged overdraft fees, and $5 million penalty that will be roughly split between the CFPB and the Office of the Comptroller of the Currency.
Under a 2010 federal rule, banks are prohibited from charging fees on ATM and debit card transactions unless the customer has first opted into an overdraft program. According to the unfair overdraft fees lawsuit, however, TCF Bank had purposely misrepresented its overdraft program as something necessary to sign up for when the customer opens an account.
The lawsuit notes that the overdraft program had become a central feature to the bank’s business model, with a heavy marketing and employee incentives. By 2014, around 66 percent of TCF’s customers had opted into the program—more than triple the amount of response at other banks at the time.
As it’s the case with most of these settlements, TCF National Bank neither admitted nor denied the CFPB’s allegations, according to the proposed settlement submitted Friday in the U.S. District Court for the District of Minnesota.
If you’ve had an account at TFC National Bank and have been charged overdraft fees, then you should soon see a check.