Company: ASB
Filing Date: 2025-02-12
Form Type: 10-K
Source: 0000007789-25-000013
Chunk: 200

Company: ASSOCIATED BANC-CORP
Filing Date: 2025-02-12
Form: 10-K
Item: Item 1A
Chunk 200
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 published additional guidance in September 2024 affirming that charging overdraft fees for ATM and one-time debit card transactions without proof of the consumer’s affirmative consent to enrollment in covered overdraft services constitutes a violation of consumer financial protection laws. 

The CFPB also has engaged in rulemaking as part of its “junk fee” initiative. In January 2024, the CFPB proposed a rule that would restrict the imposition of NSF fees. If adopted as proposed, the rule would prohibit covered financial institutions, including Associated Bank, from charging fees on transactions declined in real time, including declined debit card purchases, ATM withdrawals and peer-to-peer payments. As of December 31, 2024, the CFPB has not finalized this rule proposal. On December 12, 2024, the CFPB finalized a rule that will require large financial institutions with $10 billion or more in total assets, including Associated Bank, that offer overdraft protection services to either provide customers that receive such services with loan disclosures required under the TILA and Regulation Z, or cap any charges associated with the provision of such services at $5 or an amount that would allow the institution to cover its costs and losses with respect to the overdraft credit transaction. The CFPB’s final rule on overdraft credit is scheduled to take effect on October 1, 2025; however, continued implementation of the final rule under the new leadership of the CFPB is uncertain.

In addition, the OCC has issued supervisory guidance to address the risks associated with overdraft protection programs and overdraft fees. Specifically, the OCC noted in a 2023 bulletin that APSN transaction and representment fee practices may present a heightened risk of violations of Section 5 of the Federal Trade Commission Act of 2010, which prohibits unfair, deceptive, or abusive acts or practices. An APSN transaction refers to the practice of assessing overdraft fees on debit card transactions that authorize when a customer’s available balance is positive but later post to the account when the available balance is negative. Representment fees refer to assessing an additional fee each time a third party submits the same transaction for payment after a bank returns the transaction for NSF. The OCC further noted that banks should establish and maintain sound risk management of overdraft protection programs by establishing effective board and management oversight and appropriate procedures and practices for managing risks associated with overdraft protection programs.

In response to this increased congressional and regulatory scrutiny, and in response to enhanced supervision and enforcement of overdraft protection practices, certain banking organizations