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Financial Services Law Insights and Observations

Bank settles overdraft fee litigation for $7.5 million

Courts Overdraft Settlement Class Action

Courts

On August 10, the U.S. District Court for the Southern District of Florida granted final approval of a $7.5 million settlement, resolving a decade-long multidistrict litigation concerning overdraft fees. The settlement covers allegations that a U.S.-based affiliate of an international bank charged improper assessment and collection of overdraft fees due to “high-to-low posting.” In 2012, the bank was purchased by a U.S. national bank and the national bank inherited the litigation as the successor in interest. The settlement involves over 148,000 class members, “who, from October 10, 2007 through and including March 1, 2012, incurred one or more Overdraft Fees as a result of [the bank]’s High-to-Low Posting.” The $7.5 million settlement includes $10,000 to the sole class representative and over $2.6 million to the class attorneys (representing 35% of the settlement fund).

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