27 wvbankers.org Consumer Financial Protection Act of 2010. In addition, in its Fall 2022 rulemaking agenda list release, the CFPB included an agenda item indicating that it may propose amendments to the Regulation Z overdraft rules. Sensing the opportunity to bring complaints against deeppocketed defendants and using regulatory rhetorical fodder, law firms are ramping up demand letters threatening a lawsuit or filing a lawsuit against banks alleging customers were improperly assessed for overdraft and/or NSF fees. Even when banks amend account agreements to include arbitration provisions and class action waivers, recent court decisions provide insight as to best practices. The Supreme Court of the United States recently declined to review the 6th Circuit’s decision in Sevier County Schools Federal Credit Union v. Branch Banking & Trust Co. (BB&T), which presents a potential challenge to enforcing arbitration clauses added to account agreements. In this case, BB&T amended its account agreement by adding mandatory arbitration provisions. The Court found BB&T’s justification of continued use of the account constituted acceptance of changes and the fact that BB&T did not offer customers the ability to opt out of the arbitration provisions was problematic. This serves as a reminder that introducing arbitration agreements should follow all contractual change-of-term requirements and create a record of affirmative customer assent whenever possible. Given the costly awards to plaintiffs to date, banks should review recent supervisory findings and their own policies, customer disclosures and account agreements, internal guidelines on overdraft/non-sufficient funds fees, as well as any potential disparate impact these fees may pose. It will pay for banks to be proactive to minimize risk and exposure. As plaintiff lawyers search for impacted plaintiffs, banks should consider including binding arbitration language with class action waivers to account agreements. Such language could prevent these situations from becoming class action lawsuits. Further and in light of recent court decisions, banks seeking to adopt arbitration clauses through changes to account agreements should consider taking steps to distinguish their process from that at issue in BB&T. Options to consider could include offering the customer opt-out options, requiring customers to affirmatively take some action to accept changed terms (rather than simply continuing to use the account), or including dispute resolution provisions that explicitly provide for future amendments to add arbitration agreements. While most account agreements permit a bank to amend the provisions without notice to the customer, many banks are sending notices to customers with the amended provisions in a separate communication and highlighting any opt-out options. Bryce Hunter and Josh Jarrell lead Spilman’s Banking & Finance Practice Group. Bryce can be reached at bhunter@spilmanlaw.com or 540.512.1819. Josh can be reached at jjarrell@spilmanlaw.com or 304.291.7949.
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