A banking customer has filed an overdraft fees lawsuit filed in San Diego federal court against U.S. Bank over allegedly improper overdraft fees and out-of-network ATM fees.

The overdraft fees lawsuit encompasses a proposed class action against the financial institution of bilking customers out of millions of dollars. In this overdraft fees lawsuit, the bank is being accused of charging customers who use an out-of-network ATM when they withdraw money. The bank charges one fee for a balance inquiry and another fee for withdrawal.

Plaintiff and U.S. Bank customer Reyna M. says that such practices are not clearly disclosed and it is not one that is reasonably expected by customers to be charged. She also alleges that U.S. Bank has also broken its promises to customers when it charges them overdraft fees.

She states that oftentimes the bank will charge overdraft fees even when there are sufficient funds available at the time the customer initiates the transaction. The bank allegedly waits to settle the transaction until there are insufficient funds in the customer’s account, Reyna claims.

Reyna says, “Both practices violate the contractual agreement governing the relationship between U.S. Bank and its customers.” Claims raised in the overdraft fees lawsuit include breach of contract and violations of California’s Unfair Competition Law.

A top Democrat on the Senate Banking Committee, Senator Sherrod Brown of Ohio, and New Jersey Senator Cory Booker have recently proposed to crack down on overdraft fees by introducing a bill that would officially ban overdraft fees on ATM withdrawals and debit card transactions.

According to Brown, “Overdraft fees are a tax on paychecks already stretched thin,” he says. “This bill keeps hardworking Americans’ money in their pockets and stops big banks from slapping big fees on customers for small overdraft amounts.”

According to a recent statement made by Senator Booker, “These fees generate enormous amounts of revenue for the banks while most customers don’t even know they’ve opted into such charges.”

He adds that, “Our bill would end these unfair practices many banks use that leave some customers- especially those that are the most vulnerable-trapped in a vicious cycle of poverty.” He says that these fees often get to charge to customers that cannot afford it.

Additionally, the bill will not only prevent ATM and debit card overdraft fees, but it would also prevent banks to charge overdraft fees on checks and automatic bill payments made to customer accounts.

This would then further increase customer disclosures about overdraft fees and require banks to post transactions that come through a customer’s account in a way to minimize overdraft fees being charged.

The bill is being proposed after concerns were raised over the volume of overdraft fees having been charged to customer accounts throughout recent years. This is what led to the Federal Reserve’s ruling that overdraft fee services must be opted in by customers who choose to have the service.

Since then, overdraft fee revenue significantly decreased but since then has rebounded. However, consumer advocates are suggesting that the financial industry is still trying to figure out ways to work around the ruling.

The Overdraft Fees Lawsuit is Case No. 3:18-cv-01794-CAB-JMA, in the U.S. District Court for the Southern District of California.