Banker Beware: Bank Practices Under Increased Scrutiny As Dodd‐Frank Implementation Begins

A new wave of consumer banking litigation and regulatory activity is anticipated as financial institutions introduce new products and increase fees to offset costs and lost revenue attributable to the Dodd‐Frank Act. Several major banks have recently settled class action lawsuits for allegedly processing transactions from higher to lowest amount to maximize customer overdraft revenues, and class action attorneys are expected to use these cases as models for future litigation. Banking regulators have also increasingly shown a willingness to take on practices deemed unfair or deceptive to consumers, even if the practices are not prohibited by a particular law. This is a call for financial institutions to proactively review marketing materials, account agreements, and disclosures documents, and to ensure that new products and fees are not targeted at unsophisticated consumers.