PHOENIX–Two credit unions have separately reached multi-million settlements in class action lawsuits related to overdraft practices.
In Arizona, the $8.4-billion Desert Financial Credit Union has agreed to pay $6 million to resolve a class action lawsuit that alleged it had charged illegal overdraft fees.
According to TopClassActions.com, the settlement benefits members who have or had a checking account with Desert Financial Credit Union and who were charged an unrefunded overdraft fee between June 1, 2014, and Nov. 1, 2017, on a transaction that was authorized with a sufficient balance but settled with an insufficient balance.
The overdraft class action lawsuit had alleged Desert Financial Credit Union wrongfully charged overdraft fees on transactions that were authorized with a sufficient balance. These transactions were allegedly settled with an insufficient balance and resulted in overdraft fees, the suit added.
Desert Financial hasn’t admitted any wrongdoing but agreed to a $6 million settlement to resolve the overdraft class action lawsuit, according to the report.
Settlement in NY Case
Separately, in New York, Empower Federal Credit Union has settled with a class of account holders over similar claims that the credit union imposed illegal overdraft fees and did not meet disclosure requirements.
The $3.2-billion Empower FCU is paying $5.2 million to settle the case of Danielle Wellington v. Empower Federal Credit Union and Dianna Conley v. Empower Federal Credit Union, according to the United States District Court for the Northern District of New York.
As has been the case with numerous other similar lawsuits filed against credit unions, the plaintiffs in the case alleged they had enough money in the balance to cover the transaction if holds placed on pending transactions or deposits were not deducted from the balance.
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