Collections news at your fingertips

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today took action against Atlantic Union Bank for illegally enrolling thousands of customers in checking account overdraft programs. The CFPB found that Atlantic Union misled consumers who enrolled in this overdraft service by phone and failed to provide proper disclosures. The CFPB is ordering Atlantic Union to refund at least $5 million in illegal overdraft fees and pay a $1.2 million penalty to the CFPB’s victims relief fund.

Starting in mid-2024, Illinois hospitals will be required to take a much more active role in limiting consumers’ medical debt by screening all consenting uninsured patients for both public health insurance program coverage and hospital financial assistance eligibility as soon as reasonably practicable and before pursuing any collection action. Hospitals must track all uninsured patient declinations and failures to respond to all such offers in the uninsured patients’ medical records.

On November 30, the Director of the CFPB, Rohit Chopra, testified during the Senate Banking Committee’s hearing on the Bureau’s Semi-Annual Report to Congress. The Senate Banking Committee questioned Chopra on the Bureau’s oversight of financial institutions providing benefits under the Servicemembers Civil Relief Act (SCRA), medical debt collection, so-called “junk fees,” and the increasing popularity of buy now, pay later (BNPL) products.

The guidance focuses on the risk management of buy now, pay later (BNPL) loans, which are payable in four or fewer installments and carry no finance charges. The guidance notes that banks should maintain underwriting, repayment terms, pricing, and safeguards that minimize adverse customer outcomes and should ensure that marketing materials and disclosures are clear and conspicuous. Additionally, prudent BNPL lending includes safeguards that minimize adverse customer outcomes.

CUNA, NAFCU, and financial services organizations wrote to President Joe Biden this week asking for him to emphasize the need for proper rulemaking procedure. The organizations noted the Consumer Financial Protection Bureau continues to issue guidance that operates as a rule without the notice and comment process.