US Bank Class Action Challenges Out­-Of­-Network ATM Fees

U.S. Bank faces a class action lawsuit in California alleging that the bank improperly charges out-of-network overdraft and ATM fees.

Reyna McGovern recently filed the U.S. Bank class action lawsuit over claims that the well-known financial institution charges two fees to consumers using an out-of-network ATM to withdraw money after checking their balance. 

U.S. Bank allegedly charges one fee for checking the balance of their account and one fee for withdrawing money.

In her U.S. Bank overdraft fee class action, McGovern claims that this practice breaches the bank’s contract with its customers and violates California’s Unfair Competition law. “Both practices violate the contractual agreement governing the relationship between U.S. Bank and its customers,” McGovern says.

The U.S. Bank class action comes around the same time as two senators introducing a bill which would ban overdraft fees on ATM withdrawals and debit transactions.

The bill, proposed by Ohio senator Sherrod Brown and New Jersey senator Cory Booker, aims to prohibit unfair business practices which benefit the banking industry.

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

The bill would prevent further overdraft fees on ATM and debit transactions while also restricting how often banks could charge overdraft fees on charges from checks and recurring bill payments. These restrictions would create new rules to minimize overdraft fees via posting transactions in addition to requiring increased consumer disclosures.

“These fees generate enormous amounts of revenue for the banks while most customers don’t even know they’ve opted into such charges,” Booker said in a statement. “Our bill would end these unfair practices many banks use that leave some consumers — especially those that are the most vulnerable — trapped in a vicious cycle of poverty.”

Should this bill be passed, further U.S. Bank overdraft lawsuits or class action lawsuits may not be necessary. However, current litigation may provide relief for consumers affected by potentially shady banking tactics.

McGovern seeks to represent an “OON Class” of California U.S. Bank consumers who were charged an out-of-network (OON) fee on an ATM balance inquiry and withdrawal.

She also seeks to represent an “APPSN Class” of California U.S. Bank account holders who were charged an overdraft fee on a debit card transaction which was authorized when the account had sufficient funds.

The U.S. Bank overdraft fee class action seeks restitution, disgorgement, actual damages, statutory damages, punitive damages, exemplary damages, court costs, and attorneys’ fees.

McGovern is represented by Todd Carpenter of Carlson Lynch Sweet Kilpela & Carpenter LLP; Jeffrey Kaliel and Sophia Goren Gold of Kaliel PLLC; Hassan Zavareei of Tycko & Zavareei LLP and Jeff Ostrow of Kopelowitz Ostrow Ferguson Weiselberg Gilbert.

The U.S. Bank Overdraft Fees Class Action Lawsuit is McGovern v. US Bank NA, Case No. 3:18­-cv­-01794, in the U.S. District Court for the Southern District of California.