Union Bank Reaches $35M Overdraft Fee Class Action Settlement

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Union Bank (NASDAQ: UNB) has reached a $35 million class action lawsuit settlement over its overdraft fee policy, just months after a Miami federal judge ruled the bank would have to defend itself in the massive bank overdraft fee case: In Re Checking Account Overdraft Litigation.

Union Bank is one of more than 30 banks accused in the overdraft litigation of manipulating the order of debit card transactions so they can deplete customers’ checking accounts and trigger overdraft fees. Union Bank is also accused of “resequencing” checks so that checks for higher amounts were cleared first, causing checks for smaller amounts presented on the same day to bounce — again, triggering fees.

Bank of America recently reached a $410 million class action settlement to resolve its portion of the case, which was approved last week.

A written settlement agreement in the Union Bank overdraft fee class action lawsuit will be submitted to the court within 45 days, which will detail how consumers can receive their settlement benefits. The Union Bank overdraft fee settlement covers 350,000 non-commercial customers who were charged overdraft fees from January 2005 to August 2010 as a result of Union Bank’s “resequencing” of debits.

The case is In Re: Checking Account Overdraft Litigation, 09-cv-02036, U.S. District Court, Southern District of Florida, Miami.

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