A man has filed an overdraft fees lawsuit against Members 1^st Credit Union, alleging the financial institution unfairly charged him overdraft fees.

Lead plaintiff Michael White filed the class action lawsuit after he was allegedly charged two $37 overdraft fees on Aug. 24, 2018, on debit card transactions that he says did not overdraw his account. According to his bank statement for that month, his checking account never had a negative balance that would have been needed to generate these fees.

White claims his account never went in the negative until after Members 1^st tacked on the $74 total in overdraft charges.

“Besides being deceptive, unfair and unconscionable, these practices breach contract promises made in the Member 1^st’s adhesion contracts – specifically, the promise to charge OD Fees only on transactions which actually overdraw an account,” alleges the overdraft lawsuit.

Allegations in Overdraft Fees Lawsuit

The first proposed Class includes all Members 1^stchecking account holders who received overdraft fees charged on their accounts for transactions that did not place their checking accounts in overdraft status during the applicable statute of limitations and through the date of class certification.

The second proposed Class includes all Members 1^stchecking account holders who live within the Commonwealth of Pennsylvania and also meet the applicable criteria of the first proposed class.

According to federal law, financial institutions must receive consent from account holders before overdraft fees can be charged for ATM and non-recurring debit card purchases. The law is called Regulation E.

The overdraft fees lawsuit alleges that Members 1^stCredit Union failed to obtain legally binding informed consent “because its opt-in disclosures contained the same or similar misrepresentations regarding Member 1^st’s true overdraft policies as the account contract documents did.”

According to the Consumer Financial Protection Bureau, Regulation E is important because ATM and debit card transactions are the most frequent transactions that account holders make. Account holders who have opted in to have ATM and debit transactions covered by an overdraft protection policy allegedly have seven times as many overdrafts that generate fees on their accounts compared to those who do not opt in. Any account holder who does not opt in for ATM and debit card overdraft coverage will see a transaction declined rather than have it process through and generate overdraft status.

Members 1^stalso allegedly violated the consumer protection acts of certain states through the company’s overdraft policies.

Members 1^stCredit Union has headquarters in Mechanicsburg, Pa. and was established in 1950.

According to the overdraft lawsuit, the credit union has approximately $4 billion in assets. Most of its account holders are located in Pennsylvania.

Banks and credit unions make a lot of money by charging overdraft fees. According to a MarketWatch report from data collected by Moebs Services, Americans paid more than $34 billion in overdraft fees in 2017 alone.  It is unknown how many of these fees allegedly were ill-gotten such as the ones collected by Members 1^stthat are subject to the lawsuit.

The Overdraft Fees Lawsuit is White v. Members 1st Credit Union, Case No. 1:19-cv-00556-JEJ, in the U.S. District Court, Middle District of Pennsylvania.

If you were charged unfair overdraft fees by your bank or credit union, you could be eligible to participate in a FREE class action lawsuit investigation. If you qualify, an attorney will contact you to discuss the details of your potential case at no charge to you.

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This article is not legal advice. It is presented
for informational purposes only.