Court approves $9.7 million overdraft fee settlement
On February 25, the U.S. District Court for the Northern District of New York approved a roughly $9.7 million class action settlement resolving claims that a New York credit union improperly assessed banking fees, including overdraft fees, when members had sufficient funds in their checking accounts to pay for the transactions presented for payment. The plaintiffs also alleged, among other things, that the credit union (i) improperly charged fees on a variety of transactions for members who did not opt-in to the credit union’s protection programs; (ii) assessed fees in instances where there was no contractual basis to assess the fees; (iii) transferred money from members’ savings accounts into checking accounts to avoid negative balances and resulting fees, but still imposed the fee; and (iv) violated the terms of its contracts and various laws by imposing non-sufficient funds fees more than once on the same transaction. The settlement requires the credit union to pay approximately $5.85 million into a settlement fund, plus nearly $2.53 million in attorneys’ fees, $168,030 in costs, and $15,000 service awards to each of the three named plaintiffs. The settlement amount also includes the value of the policy changes to be made by the credit union.