United Federal Credit Union (Saint Joseph, MI) has agreed to pay $1.75 million to settle a class action lawsuit over the credit union's overdraft practices.
The class action lawsuit alleges that United Federal Credit Union did not properly opt members into its overdraft program for ATM and debit card payment transactions, and improperly charged Overdraft Fees when members had enough money in the ledger balances of their checking accounts, but not in their available balances, to pay for the transaction in question.
There are two groups included in this proposed class action settlement. The first is all members of the credit union who were charged an Overdraft Fee for any payment transaction from October 3, 2011 to September 30, 2018, and, at the time such fee was imposed, that person had sufficient funds in the ledger balance but not the available balance in his or her account to complete the transaction. The second group is all members of the credit union who were charged Overdraft Fees for ATM and debit card transaction for the first time from August 15, 2010 to September 30, 2018.
According to an expert witness, 10,297 members were assessed at least one overdraft fee between October 3, 2011 and September 30, 2018, when the member had a positive ledger balance in their account to cover the transaction at issue. There were 64,165 such fees totaling $1,919,818.
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