NEW BERLIN, Wis.—Landmark Credit Union has settled a class action lawsuit over the credit union's overdraft practices.
Danell Behrens filed a class action overdraft fees lawsuit in February 2017 against Landmark Credit Union, alleging the credit union charged its members more than $2 million in overdraft fees, in violation of the Electronic Fund Transfer Act (ETFA) and the credit union’s own overdraft program contract.
“According to analysis, there were 14,286 members of Landmark that were assessed at least one overdraft fee between February 9, 2011 and February 28, 2017 when they had sufficient funds to cover the transaction (first class). These overdraft fees totaled $1,576,955,” noted Keith Leggett, the former senior vice president and senior economist at the ABA, on his blog.
The second class had 6,020 credit union members that were assessed at least one overdraft fee for an ATM or debit card transaction between Feb. 9, 2016 and Feb. 28, 2017. These overdraft fees totaled $652,410.
Refunds Being Paid
After accounting for overlaps, improper overdraft fees totaled almost $2.1 million, Leggett said.
As part of the settlement agreement, Landmark has agreed to refund some of those fees and change its overdraft practices, Leggett said, noting that Landmark will pay $950,000 into a settlement fund.
Landmark will change its overdraft assessment policy so that it charges overdraft fees using the available balance method. This change will last at least three years. It is estimated that class members will save an estimated $385,000 per year, Leggett said.
Also, Landmark will waive $10,000 in assessed, but uncollected, overdraft fees. The class representative will receive an award of $10,000, Leggett said.