Once again, the CFPB visits Sweet Home Alabama.

Tuesday, the CFPB announced its first enforcement action involving illegal overdraft fees by a bank. In this case, it was Regions Bank, here in our backyard in Birmingham, Alabama. Birmingham is fast becoming a familiar venue for the CFPB media relations and enforcement teams. Birmingham was the location of the very first CFPB Field Hearing in 2012, the home of Warren Buffet’s RealtySouth that suffered the first ECOA enforcement action for illegal kickbacks, the location late last month of a Presidential visit in advance of significant potential rulemaking for payday, vehicle title and similar loans, and now this first of its kind action against Regions.

The CFPB cited Regions for a multitude of failures.

First, Regions failed to ask customers if they wanted overdraft services before charging them for such. And, it allegedly let this practice continue for a year after it knew about it. Result: Hundreds of thousands of customers paid over $49 million in illegal charges.

Second, it failed to follow the “opt-in” rule promulgated by the Federal Reserve Board that gives customers “overdraft” protection while using their debit cards. Result: Regions failed to obtain customer consent from many affected customers resulting in customers paying 10’s of millions of dollars in illegal overdraft fees.

Third, the CFPB claimed it flubbed its own “payday loan product” – called Ready Advance, by charging overdraft or NSF fees in addition to collecting its payments in direct conflict with its description of how these loans would work. Result: $2 million was charged to tens of thousands of its deposit advance customers.

Final tally: Regions has refunded $49 million to customers thus far. Tuesday’s order requires Regions to ensure that all remaining customers are compensated for all such losses, and Regions will pay to the CFPB a $7.5 million fine for the violations.

Take note: The CFPB Release said, “And, it is worth noting, Regions’ conduct would have warranted an even stiffer penalty if it had not voluntarily refunded consumers and promptly self-reported this problem to the bureau once it was brought to the attention of senior management.” This is a prime example of the CFPB looking for ‘responsible conduct’ in enforcement actions (which we discussed in today’s scheduled blog post).