Fifth Third Bank Early Access Program Class Action Lawsuit

Fifth Third Bank charges checking account customers illegally high interest rates on short-term lines of credit, according to a class action lawsuit filed yesterday.

Plaintiffs Lori and Daniel Laskaris allege in the class action lawsuit that Fifth Third Bank violated federal law by charging “usurious” interest rates through its Early Access Program, which allows checking account customers to open a line of credit to obtain short-term advances on their regular direct deposits.

Fifth Third Bank claims it charges an APR of 120% for every advance made through the Early Access Program, but this is “false and misleading,” according to the class action lawsuit.

“The true APR is almost always much higher…. [and] the quoted 120% APR is accurate only if the customer does not repay the loan and the interest until 30 days after taking the advance,” the class action lawsuit states.

In reality, most customers pay back their advances immediately after receiving them yet the bank still charges the same amount of interest as if the repayment had occurred 30 days after the advance was forwarded. In some cases this results in interest rates as high as 1,000% per year once annualized, making the 120% APR claim false and misleading under the National Banking Act and Florida law.

“At its roots, the Early Access Program is the same as pay-day loan programs usually offered by store front cash advance businesses. These store-front operations earned a reputation for preying on the financially desperate by offering loans at interest rates that shock the conscience. Banks historically refrained from offering these types of loans due to laws preventing banks from charging usury interest rates for loans to customers,” the class action lawsuit states.

“For the most part, the Early Access Program mirrors pay-day loan programs with one important exception — Fifth Third has direct access to its customers’ checking accounts and the ability to pay itself back immediately with customers’ next direct deposit.”

The Fifth Third Bank class action lawsuit is brought on behalf of all Florida-based customers who used the Early Access program within the past five years and repaid their advances inside of the 30-day payment window.

It is seeking over $5 million in damages and a court-ordered injunction barring Fifth Third from continuing to charge interest rates in excess of those allowed under federal law.

The Fifth Third Bank Early Access Program Class Action Lawsuit case is Laskaris, et al. v. Fifth Third Bank, Case No. 13-cv-20529, U.S. District Court for the Southern District of Florida.

The plaintiffs are represented by Kevin McLaughlin and Jason Whittemore of Wagner Vaughan & McLaughlin, Steven A. Owings and Alex Owings of Owings Law Firm and T. Brent Walker of Walker Law PLC.

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