Regions Bank Will Pay Customers $141 Million for Illegal Overdraft Fees

Overdraft fees totally suck — you get charged for money you obviously don’t have. But know what’s even worse? Illegal overdraft fees. And it looks like Regions Bank charged customers millions they shouldn’t have.

Now Regions Bank has to shell out $191 million — $50 million in penalties and $141 million in customer reimbursements — after they settled a case with the U.S. government. That’s pretty dang close to the amount of the Capital One settlement earlier this year. And there’s a pretty similar (but bigger) Wells Fargo settlement happening, too.

Could you be one of the customers who’s owed money? Here’s everything you need to know about the Regions Bank settlement:

 

If you got an overdraft fee from 2018 through 2021, some of the $141 million refund could be yours.

The entire settlement is for $191 million, but Regions will pay $50 million toward a federal penalty. The rest goes to customers who were charged the illegal fees.

If you got any surprise overdraft fees from Regions Bank and weren’t voluntarily signed up for the overdraft protection program, you have a refund coming.

 

You’ll probably get paid out by check or credit to your account.

Although we don’t officially know how much customers will receive, when they’ll receive the funds, or how they’ll make a claim, we can guess based on the last time this happened. (Yep, it’s happened before.)

In 2015, Regions Bank got caught doing the same thing by the government and had to pay $7.5 million in fines and $49 million to customers.

Back then, people got full refunds credited directly to the affected Regions Bank accounts or checks mailed to the address on file if their accounts were closed. Chances are, the same payout methods will happen this time around, too.

 

 

Regions Bank took more than $100 million in illegal overdraft fees — up to $216 per day.

The U.S. Consumer Financial Protection Bureau says Regions Bank charged customers “surprise” overdraft fees between 2018 and 2021 — hitting them with $36 charges up to six times a day — even after the bank told customers they had enough funds in their account.

Basically, it all came down to the way Regions logged transactions. Rather than entering ATM and debit card transactions into a customer’s account the night they made a transaction, sometimes the transactions would hit days later, triggering the overdraft fees.

Since the bank controls how and when to pull funds, that left customers with unexpected and confusing fees.

The government says Regions misrepresented customers’ account balances before hitting them with the fees — which is an illegal practice.

 

Avoid overdraft fees by keeping your account balance no lower than -$5.

In January 2022, Regions Bank changed their overdraft policy from hitting customers with fees up to six times per day down to three times per day. You can also get your paycheck up to two days sooner, so there’s a smaller risk of your account going into the negative.

They also say that as long as your account isn’t more than $5 in the negative, they won’t charge your overdraft fees for transactions posted the same day.