BBVA USA Overdraft Disclosures Violate Reg E California Class Action

The Federal Reserve has set forth Regulation E, which requires that banks and other institutions must make certain disclosures in a stand-alone document and obtain the consent of the consumer before they charge that consumer overdraft fees on one-time debit and ATM transactions. The complaint for this transaction alleges that BBVA USA violates Reg E as well as California law with its disclosures of its overdraft program, as set forth in its document “What You Need to Know About Overdrafts and Overdraft Fees.”

According to the complaint, Reg E requires that BBVA get the consent of the customer to its overdraft program, using “a written, stand-alone document that fully and accurately describes in an easily understandable way its overdraft services…” The complaint alleges that BBVA’s document fails to fulfill Reg E requirements in a number of ways.

First, the complaint alleges that the language it uses to describe when it will charge overdraft fees is “ambiguous and misleading.” This, the complaint says, is because “the opt-in disclosure agreement does not disclose that BBVA uses an internal artificial account balance to determine if a debit card or ATM transaction will be considered [to overdraw the account] (i.e., ‘available balance’), instead of the official and actual balance of the account.”

In fact, it allegedly “describes an overdraft using language that conveys BBVA’s use of the actual balance instead of the artificial available balance to assess overdraft fees.”

Because Reg E does not allow banks to charge these kinds of overdraft fees without proper disclosures to the customer and the customer’s affirmative consent to them, the complaint claims that any such overdraft charges BBVA has assessed under this program are illegal. It says that BBCA may not continue to “opt-in” customers to its overdraft program with these allegedly flawed documents.

According to the complaint, the disclosures also violate California’s Unfair Competition law (UCL), which is part of the California Business & Professions Code.

Two classes have been defined for this action.

The Regulation E Class is all California customers of BBVA who have or had accounts with BBVA and who were charged an overdraft fee on a one-time debit card or ATM transaction, between December 4, 2019 and the date the class is certified in this case.

The UCL, Section 17200 Class is all California customers of BBVA who have or had accounts with BBVA and who were charged an overdraft fee on a one-time debit card or ATM transaction, between December 4, 2016 and the date the class is certified in this case.

Article Type:
Topic: Consumer

Most Recent Case Event

BBVA USA Overdraft Disclosures Violate Reg E California Complaint

December 4, 2020

The Federal Reserve has set forth Regulation E, which requires that banks and other institutions must make certain disclosures in a stand-alone document and obtain the consent of the consumer before they charge that consumer overdraft fees on one-time debit and ATM transactions. The complaint for this transaction alleges that BBVA USA violates Reg E as well as California law with its disclosures of its overdraft program, as set forth in its document “What You Need to Know About Overdrafts and Overdraft Fees.”

BBVA USA Overdraft Disclosures Violate Reg E California Complaint

Case Event History

BBVA USA Overdraft Disclosures Violate Reg E California Complaint

December 4, 2020

The Federal Reserve has set forth Regulation E, which requires that banks and other institutions must make certain disclosures in a stand-alone document and obtain the consent of the consumer before they charge that consumer overdraft fees on one-time debit and ATM transactions. The complaint for this transaction alleges that BBVA USA violates Reg E as well as California law with its disclosures of its overdraft program, as set forth in its document “What You Need to Know About Overdrafts and Overdraft Fees.”

BBVA USA Overdraft Disclosures Violate Reg E California Complaint
Tags: Did Not Make/Receive Proper Disclosures, Overdraft Fees, Your Bank