SYRACUSE, N.Y.–Empower FCU has become the latest credit union to announce it has reached a settlement in a class action lawsuit related to its overdraft practices.
The United States District Court for the Northern District of New York said it has granted final approval to a $5.2 million settlement between Empower FCU and plaintiffs who had alleged illegal overdraft fees and that the credit union did not fully meet requirements for disclosures.
There are two lawsuits involved: Danielle Wellington v. Empower Federal Credit Union and Dianna Conley v. Empower Federal Credit Union, both of which were class actions.
The group now eligible for a portion of the settlement include those members of the $3.2-billion credit union who had a checking account with Empower and were assessed an overdraft fee on any type of payment transaction from April 27, 2015 through Sept. 24, 2021, “against their checking account if, at the time such fee was assessed, the member had sufficient money in his or her ledger balance to cover the transaction that resulted in the fee,” according to feeoverdraftsettlement.com, which is operated by KCC Class Action Services, LLC.
Additional Claims
“The Named Plaintiffs claim Defendant improperly charged overdraft fees in checking accounts when members had enough money in their balances to cover the transaction if holds placed on pending transactions or deposits were not deducted from the balance, i.e., the ledger balance,” the website states. “Defendant does not deny it charged overdraft fees but contends it did so properly and in accordance with the terms of its agreements and applicable law. Defendant contends it assessed overdraft fees based on the available balance in a member’s account. Defendant maintains that this practice is proper and was disclosed to its members, and therefore denies that its practices give rise to claims for damages by the Named Plaintiffs or any Class Member.”
As CUToday.info has reported, several other similar class action lawsuits related to overdraft practices have been settled in recent months by credit unions.