Dive Brief:

• TD Bank will pay a $25 million fine and $97 million in restitution to more than 1.4 million customers, as a result of a settlement with the Consumer Financial Protection Bureau (CFPB) over "deceptive" overdraft enrollment practices that took place from 2014 to 2018, the bureau said Thursday.
• At issue is TD's Debit Card Advance (DCA) feature, which the bank marketed as free but charged customers $35 for each overdraft transaction, the bureau said. The bank also failed to get customers' affirmative consent to enroll in the program, telling them the feature was included with new consumer checking accounts when, in actuality, DCA was an opt-in program, the CFPB said.
• In some cases, the bank required new customers to sign its overdraft notice with the "enrolled" option pre-checked and failed to inform consumers of the feature or obscured the overdraft notice so a new customer would not review their pre-marked "enrolled" status, the bureau said.

Dive Insight:

In a statement, TD said it disagrees with the CFPB's conclusions but has cooperated with the bureau. The bank said it did not admit to any wrongdoing under the civil settlement.

"Throughout the period in question, TD had a clear process to secure formal consent before providing this service to customers, enabling them to make an informed and conscious choice," the bank said Thursday. "Prior to this settlement, TD had already voluntarily and proactively implemented enhancements to our Debit Card Advance disclosure and enrollment processes beginning in 2014."

The consent order marked the second nine-figure penalty against a major Canadian bank in 24 hours. Scotiabank agreed Wednesday to pay $127 million to the Justice Department and Commodity Futures Trading Commission to settle allegations of false statements and price manipulation in the precious metals market.

TD Bank managers instructed employees to verbally present Debit Card Advance as free "while downplaying the fees and disclosures associated with the service," the CFPB said in its consent order Thursday.

"In some instances, TD Bank engaged in abusive acts or practices by materially interfering with consumers' ability to understand DCA's terms and conditions," the bureau said.

The CFPB also concluded the bank failed to establish and implement reasonable written policies and procedures concerning the accuracy and integrity of consumer account information it supplied to two credit bureaus. TD also failed to conduct timely investigations of indirect consumer disputes concerning some of that information, the CFPB said.

The consent order requires the bank to correct its DCA enrollment practices, stop using pre-marked overdraft notices to obtain a consumer's affirmative consent to enroll in DCA and adopt policies and procedures that align with laws on reporting consumer information to credit bureaus.