The Office of Thrift Supervision has reached an agreement with Woodforest Bank of Texas to pay a penalty of $400,000 and to refund an additional $12 million back to consumers who were charged excessive fees for overdraft protection.
"Overdraft protection programs can benefit consumers, but if done the wrong way, they can victimize the customers they are supposed to be helping," said John E. Bowman, OTS acting director in a press release. "We are taking these enforcement actions and issuing this guidance today to ensure OTS-regulated institutions conduct these programs in the right way."
Woodforest Bank will deposit the $12 million into an account to reimburse current and former customers. The bank was also ordered to stop the unfair and deceptive practices, reform their overdraft program and develop a plan to reimburse consumers.