Over the past several years, many U.S. banks and credit unions have been under investigation as the fairness of overdraft fees has been questioned.

The Meriwest overdraft protection policies are also being looked at by consumer advocates, because some believe the Bay Area credit union may not have the best interest of its customers in mind.

Meriwest Credit Union is a popular credit union in San Francisco’s Bay Area. It also operates in Arizona and began as the IBM San Jose Employees Federal Credit Union in 1961.

Recently, other U.S. banks and credit unions have been fighting against savvy customers who have filed overdraft fee lawsuits alleging overdraft protection fees were unfair.

In 2010, Wells Fargo was ordered to pay $230 million to customers to rectify claims that overdraft fees were reordered to benefit the bank’s intake of fees from customers. Last year, a Supreme Court decision declined the bank’s request to review the order.

More recently, the Consumer Financial Protection Bureau has sued TCF Bank claiming that the bank misled customers resulting in large overdraft fees. This lawsuit alleges that because TCF stood to benefit from fees, it used a manipulative scheme to get customers to opt-in to their overdraft program.

Is Meriwest Overdraft Protection Unfair?

Much like other big banks and credit unions, Meriwest overdraft protection is an opt-in program. In 2010, the Federal Reserve ordered that these practices must be an opt-in program for customers. Customers must agree to the overdraft protection in order for fees to be assessed and the program to take action.

If a customer has opted in to overdraft protection, the credit union may pay transactions that exceeds the amount of money in his or her account. Meriwest overdraft protection policies charge $35 per transaction that overdraws a customer’s bank account.

If a check is written or a point of sale transaction takes place, the credit union may pay the transaction instead of letting it overdraw the account. The credit union then charges the customer a fee, then expects the customer to deposit funds to cover the transaction and any associated fees.

Meriwest overdraft protection fees are charged for every transaction that is posted to the customer’s bank account when the account is at a zero balance or lower.

Some credit unions and banks, including Wells Fargo, have been accused of reordering transactions to benefit the banking institution. Essentially, the allegations say that instead of posting each transaction to the account chronologically, the bank or credit union posts transactions from highest amount to lowest amount.

How this practice benefits the banking institution is that a larger transaction will drain the account quicker, resulting in more transactions that overdraw the account and trigger more overdraft fees.

Meriwest’s website claims that the order in which they post transactions is completely at their discretion. A Meriwest customer may not know what Meriwest overdraft protection fees will post to their account.

Overdraft fees are, in the opinion of many, a large moneymaker for banks and credit unions. CNBC reports that in the first quarter of 2016 alone, 626 large U.S. banks took in $8.4 billion dollars from non-sufficient funds fees and overdraft fees alone.

If you believe you have been unfairly charged for Meriwest overdraft protection fees, you may benefit from speaking to an experienced attorney and may stand to reap financial compensation.

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