CONCORD, N.H.– A court here has ruled that a lawsuit against Granite State Credit Union over overdraft fees may move forward.
In a 10-page order, U.S. District Court Judge Landya McCafferty, the chief district court judge in New Hampshire, rejected efforts by the Manchester-based credit union to throw out the lawsuit, the Manchester Union Leader reported.
At issue is the $30 overdraft fee charged by the credit union. The lawsuit was filed in June 2021 and lawyers are seeking class-action certification.
The plaintiffs in the lawsuit are Rita and Edwin Grenier of New Hampshire, who are being represented by a national law firm.
In their lawsuit, the Greniers say the credit union charges a $30 overdraft fee.
"The overdraft fee is a punitive fee, rather than a service fee, which makes it even more unfair because most account overdrafts are accidental and involve a small amount of money in relation to the fee," the suit reads.
Additional Lawsuits
In her 10-page order, McCafferty notes that customers of 10 financial institutions across the country have filed similar suits. As CUToday.info has previously reported, several law firms nationally have specialized in filing the overdraft lawsuits; credit unions have been fairly successful in winning such suits or having them dismissed.
According to the Union Leader, the Grenier lawsuit faults the $593-million GSCU for not specifying what triggers an overdraft.
In an opt-in disclosure provided to all members, Granite State tells members it charges the fee "when you do not have enough money in your account,” the report notes.
Federal law requires credit unions to use specific language in a single document.
Issue Around Disclosures
In her ruling, McCafferty wrote, “Issues occur when a disclosure does not adequately convey how overdraft fees are assessed."
“GSCU lawyers have maintained the credit union disclosed the use of the actual balance in its five-page membership agreement,” the Union Leader reported. “But McCafferty said that federal regulations make it clear that the disclosure must be in a stand-alone document.”
The lawyers bringing the case plan to move for class certification by the end of February 2022.
The Grenier lawyers are seeking compensatory damages, return of all overdraft fees with interest, statutory damages, attorney fees, and an order forbidding wrongful overdraft fees, the Union Leader stated.