PORTSMOUTH, N.H.–A federal judge has given the OK for a class action lawsuit to move forward against Northeast Credit Union that alleges it imposes overdraft fees using members’ “available balance” as opposed to “actual” or “ledger balance.”
U.S. District Court Judge Joseph DiClerico wrote in his order that available balances “can be less, and even considerably less,” than members’ actual balances. DiClerico said the discrepancy is due to how Northeast Credit Union (NECU) credits members’ deposits and reduces their balances for pending but not-yet paid debts.
The plaintiff in the suit is Joseph Walbridge of Milton, N.H., who is being represented by attorney Sean O’Connell of the Shaheen and Gordon. O’Connell did not return Seacoast Media Group’s request for comment.
The lawsuit states that “For credit unions such as NECU, overdraft fees are a major source of revenue and a profit center.”
In response, Russell Hilliard from the Portsmouth, N.H. firm of Upton and Hatfield, who is representing Northeast Credit Union, said, “Northeast, like all credit unions, is a member-owned, volunteer-governed, not-for-profit financial cooperative that exists to serve its members. Northeast has and will respond to the allegations in the federal lawsuit through appropriate pleadings, including an answer to be filed next week. Northeast Credit Union follows all rules and regulations relative to overdrafts as established by the National Credit Union Administration and the Federal Reserve.”
According to SeacoastOnline.com, Walbridge filed a six-count federal suit against NECU and 100 of its agents or subsidiaries (identified as Does 1-100), claiming he was improperly assessed overdraft fees. His suit seeks to included anyone who incurred overdraft fees by NECU for a time period to be determined.
In the suit, Walbridge alleges he had an actual checking account balance of $111.09 in his credit union account when he made a $32.43 debit card payment, but was found by NECU to have insufficient funds and was assessed three $32 overdraft fees, SeacoastOnline.com reported.
While the judge dismissed three counts in the plaintiff’s suit, one of the counts that has been allowed to continue alleges NECU breached its “opt-in agreement” on overdraft services. The judge noted the agreement does not explain what is meant by the words, “When you do not have enough money in your account to cover a transaction.”
According to the court, NECU did not use the words “available balance” in the contract, but instead used the phrases “enough money,” “insufficient funds” and “non-sufficient funds,” SeacoastOnline.com reported. The judge wrote that NCU “has not shown that the only reasonable meaning” of the terms in the agreement is available balance, therefore that claim is allowed to proceed through the legal process.
The federal court scheduled a 2-week trial to commence Sept. 4, 2019.