ATLANTA–A federal judge here has ruled that LGE Community Credit Union cannot force class settlement from a suit that accused the CU improperly charging overdraft fees on an individual who sued separately in state court.
As CUToday.info originally reported here, a case against LGE Community CU was originally filed in 2017 and is similar to those filed against other credit unions and financial institutions that allege the way payments were processed led to members/consumers being assessed overdraft fees even though their balances were positive at the time of the transaction.
In the 2017 ruling, Chief Federal District Court Judge Thomas W. Thrash, Jr. dismissed the suit against LGE, writing in his opinion, “None of these cases persuade the Court that the Plaintiff’s interpretation is anything more than her own idiosyncratic reading of the agreements.
Siding With Plaintiff
In the latest ruling in the case Carol Tims v. LGE Community Credit Union, the judge has sided with the plaintiff, who is alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the Electronic Fund Transfer Act (EFTA).
“The district court dismissed plaintiff's claims under Federal Rule of Civil Procedure 12(b)(6) and held that the two parties' agreements unambiguously permitted LGE to assess overdraft fees using the available balance calculation method,” according to Justia Law. “The Eleventh Circuit reversed and held that the agreements were ambiguous as to whether LGE could rely on an account's available balance, rather than its ledger balance, to assess overdraft fees. Therefore, the court held that plaintiff properly pleaded a claim for breach of contract, and breach of the implied covenant of good faith and fair dealing.
CU is ‘Not Protected’
“The court also held that plaintiff alleged a claim under the EFTA because the Opt-In Agreement could describe either the available or the ledger balance calculation method for unsettled debts; plaintiff had no reasonable opportunity to affirmatively consent to LGE's overdraft services; and LGE was not protected from liability by the safe harbor,” Justia Law stated.
The court has now remanded for further proceedings.
A copy of the lawsuit can be found here.
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