Bank overdraft fees affect millions of Americans. Banks charged consumers nearly $40 billion in overdraft fees during 2009 alone. Not content with the fees they were getting, some banks adopted a practice of re-sequencing their customers’ debit card, ATM and check card transactions from highest to lowest dollar amount (as opposed to the order in which the transactions actually occurred). This enabled these banks to increase their overdraft fee revenues, and thus their profits, at the expense of their customers. In re Checking Account Overdraft Litigation is federal multi-district litigation against more than 35 banks that seeks to recover those fees. The plaintiffs, represented by Grossman Roth and law firms from around the country, allege that the banks’ practice of re-ordering transactions was designed to maximize the number of overdrafts in order to generate increased overdraft fees for the banks, in violation of the banks’ duty of good faith to their customers and certain states’ consumer protection laws. Some of the banks have settled the cases against them, including Bank of America ($410 million), Union Bank ($35 million), Commerce Bank ($18.3 million), and Associated Bank ($13 million). Cases against other banks are at varying stages of litigation.
Below are significant documents from this litigation.
DE 2224 – ORDER Denying [1384] Motion to Dismiss for Lack of Jurisdiction or, in the Alternative, to Stay in Favor of Arbitration (Garcia v. Wachovia)
DE 2150 – ORDER of Final Approval of Settlement, Authorizing Service Awards, Granting Application for Attorneys’ Fees (BOA)
DE 305 – Order Ruling on Omnibus Motion to Dismiss
DE 1763 – Order Granting Class Certification (Larsen v Union Bank)