US Bancorp [corporate website], one of the 10 largest banks in the US, on Monday announced that they have agreed to a $55 million settlement to resolve lawsuits by customers who sued over excessive overdraft fees. The settlement is part of ongoing national litigation challenging the overdraft practices of 35 banks [Reuters report]. The agreement is subject to approval by Judge James Lawrence King of the US District court for the Southern District of Florida [official website]. A similar settlement, reached by PNC Financial Services [corporate website] last week for $90 million, is also pending approval from King. If approved, Bancorp and PNC will join Bank of America (BOA) and JPMorgan Chase & Co (JPMC) [corporate websites] in settling overdraft lawsuits.
Overdraft fees have been the subject of copious litigation recently. In May King approved a settlement in an overdraft case for JPMC requiring the company to pay $110 million to customers [JURIST report] in order to resolve the litigation. In November King approved a settlement [JURIST report] in a class action suit against BOA for excessive overdraft fees. The settlement called for BOA to pay $410 million to 13.2 million people who had BOA debit cards between 2001 and 2011. BOA was among more than two dozen US, Canadian and European lenders named as defendants in the class action lawsuit, which consolidated claims across the country in 2009. In their amended complaint [text, PDF], the plaintiffs claimed that BOA's practices were deceptive in that they did not reasonably notify customers that they had the option of opting out of the overdraft scheme and declining transactions. In November 2009, the UK Supreme Court [official website] ruled [JURIST report] that the British government could not challenge the fairness of bank overdraft fees as a matter of law.