District Court approves $75 million overdraft settlement

Courts Overdraft Settlement Class Action Consumer Finance

On January 21, the U.S. District Court for the Western District of North Carolina granted final approval to a $75 million class action settlement to resolve allegations that a national bank improperly charged class members overdraft and insufficient fund fees (NSF). Class members include (i) individuals who held consumer checking and/or savings accounts at the bank who paid and were not refunded a retry transaction fee or one or more intrabank transaction fees; and (ii) checking and/or savings account holders who paid and were not refunded an overdraft or NSF fee on a transaction “that would not have been assessed if [the bank] had delayed the posting of previously assessed NSF/[overdraft] fees until the posting of a deposit that was sufficient to cover those fees, all outstanding debit transactions and any additional debit transactions made that day.” Under the terms of the settlement, the bank has agreed to pay $75 million into a settlement fund that will go towards class member payments, notice and administration costs, attorneys’ fee and expenses, and service awards. The bank must also stop assessing certain overdraft and NSF fees, improve its overdraft and NSF disclosures, and improve account disclosures and explanations related to circumstances where an account holder will incur an intrabank transaction fee, as well as disclosures for its fee accrual process.