Current Developments in Bank Deposits and Payment Systems

[co-author: D. Patrick Yoest]

INTRODUCTION

This survey summarizes several recent developments affecting bank deposits and payment systems. These include payments-related consent orders and enforcement actions by the Consumer Financial Protection Bureau (“CFPB”) and the Federal Trade Commission (“FTC”), amendments to the remittance transfer provisions of the Remittance Rule related to reporting requirements for the disclosure of rate and fee information for international money transfers, and amendments to Regulation D related to limitations on electronic fund transfers for savings accounts.

CFPB CONSENT ORDERS AND ENFORCEMENT ACTIONS

FIFTH THIRD BANK

The CFPB sued Fifth Third Bank, N.A. (“Fifth Third”) in March 2020, alleging that Fifth Third failed to gain authorization from customers when opening accounts and enrolling them in services. Fifth Third’s alleged practices violated the Consumer Financial Protection Act of 2010 (“CFPA”), the Truth in Lending Act, and the Truth in Savings Act. The CFPB alleged that Fifth Third took the following actions without customers’ knowledge or consent: opening deposit accounts for customers, in some cases resulting in fees; issuing credit cards to customers, resulting in fees; enrolling customers in Fifth Third’s online banking services; and opening Early Access lines of credit for customers, which allow customers to withdraw funds from their deposit accounts before such funds have been deposited in the accounts.

Originally published in The Business Lawyer; Vol. 76, Spring 2021.