Bank / Credit Union

TD Bank to pay $122M in CFPB settlement

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August 21, 2020

TD Bank is being ordered to pay $97 million in restitution to approximately 1.42 million consumers, as well as a $25 million civil penalty to the Consumer Financial Protection Bureau, for illegal overdraft enrollment practices, according to a Forbes report.

The overdraft enrollment practices took place between January 2014 and December 2018, and impacted new checking account customers who were charged nonrefunded or nonwaived "covered overdraft fees" when they used the bank's Debit Card Advance program.

The program had been represented to customers as a free service or a feature for new checking accounts, but the bank charged customers $35 for each overdraft transaction paid through its DCA, according to Forbest.

TD's overdraft enrollment practices violated the Electronic Fund Transfer Act, regulation E, and the Consumer Financial Protection Act of 2010 that covers deceptive marketing tactics.

As part of the settlement, TD Bank has also been ordered to correct its DCA enrollment practices.

No timeframe has been set for when consumers will see their share of the settlement, although the bank has approximately 60 days to present a written plan in determining compensation amounts and distribution of payments to current and former customers.