Banco Popular overdraft fee settlement overview:
- Who: The bank previously known as Banco Popular agreed to pay $1.5 million to end claims brought against it by Frankie Lipsett.
- Why: Lipsett claimed Banco Popular — now known as Popular Community Bank — charged customers unfair overdraft fees.
- Where: The Banco Popular settlement is the result of a class action lawsuit filed in New York federal court.
Popular Community Bank agreed to pay $1.5 million to put an end to claims it charged unfair overdraft fees while operating as Banco Popular.
The settlement ends a class action lawsuit originally filed in May 2022 by a consumer arguing the former Banco Popular breached its contractual promises to its customers and misrepresented the way it assessed fees.
The consumer, Frankie Lipsett, claimed Banco Popular charged overdraft fees on settled transactions where his balance was positive when the bank first authorized the transaction and deducted the funds.
In addition to the settlement funds, Popular Community Bank agreed to no longer charge overdraft fees on transactions that were previously authorized against sufficient available funds.
Popular Community Bank also agreed not to charge any of the contested fees for a period of five years, according to the class action settlement.
Banco Popular settlement sum about 46% of amount in contested fees
The $1.5 million settlement fund amount was proposed by the mediator of the agreement, with the sum making up about 46% of the original $3.25 million in contested fees that were identified during discovery.
Lipsett, in an unopposed motion for preliminary approval, said the agreement not to charge the challenged fees for five years represents an additional $3 million in savings for bank customers.
“The settlement amount is an excellent result for the class members,” the motion for preliminary approval says.
Top Class Actions will provide claim filing instructions once the settlement administrator website goes online. Consumers interested in receiving updates for this class action settlement may do so by signing up for the TCA newsletter.
In a similar case, Bank of America agreed to pay $8 million last year to put an end to claims the bank charged unfair overdraft fees and non-sufficient fund fees on checks.
Were you charged an unfair overdraft fee by Banco Popular? Let us know in the comments.
The plaintiff is represented by Michael R. Reese of Reese LLP and Jeffrey Kaliel of Kaliel Gold PLLC.
The Banco Popular overdraft fee settlement is In re: Axelrod, et al. v. Lenovo (United States) Inc., Case No. 4:21-cv-06770, in the U.S. District Court for the Southern District of New York.
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