Current developments in bank deposits and payment systems | Hudson Cook, LLP

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[co-author: D. Patrick Yoest]

INTRODUCTION

This survey summarizes several recent developments affecting bank deposits and payment systems. These include payment-related consent orders and enforcement actions by the Consumer Financial Protection Bureau (“CFPB”) and Federal Trade Commission (“FTC”), changes to the funds transfer provisions of the funds transfer rule related to reporting requirements for the disclosure of information on rates and charges for international money transfers and changes to rule D relating to limitations on electronic funds transfers for bank accounts saving.

CFPB CONSENT ORDERS AND ENFORCEMENT MEASURES

FIFTH THIRD BANK

The CFPB sued Fifth Third Bank, NA (“Fifth Third”) in March 2020, alleging that Fifth Third did not obtain authorization from customers when opening accounts and signing up for services. Fifth Third’s alleged practices violated the Consumer Financial Protection Act 2010 (“CFPA”), the Truth About Loans Act and the Truth About Savings Act. The CFPB alleged that Fifth Third took the following actions without the clients’ knowledge or consent: opening deposit accounts for clients, in some cases incurring fees; issuing credit cards to customers, incurring fees; registering customers for Fifth Third online banking services; and opening customer early access lines of credit, which allow customers to withdraw funds from their deposit accounts before those funds have been deposited into the accounts.

Originally published in The Business Lawyer; Flight. 76, spring 2021.



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