Another Credit Union Settles Overdraft Fee Case As Litigation Wave Continues
By CU Today Staff —
VANCOUVER, Wash.— iQ Credit Union has agreed to provide more than $1 million in cash, debt forgiveness and fee-practice changes to settle a class-action lawsuit alleging it improperly charged certain overdraft and non-sufficient funds (NSF) fees, according to settlement documents and Claim Depot.
The $2.3-billion CU denied any wrongdoing but agreed to settle to avoid the expense and uncertainty of continued litigation.
Under the proposed settlement, current and former members who were charged overdraft fees on debit card transactions that were authorized when sufficient funds were available but later settled into overdraft (known as APSN fees), or NSF fees on the second or third presentment of the same payment item, between Dec. 12, 2018, and July 31, 2023, may receive pro rata cash payments without filing a claim, according to Claim Depot.
Former members also will receive nearly $59,000 in unpaid fee forgiveness, while iQ Credit Union has agreed to stop charging the challenged APSN and retry NSF fees for at least three years, a change estimated to be worth about $195,000.
The lawsuit alleged iQ Credit Union violated its account agreements and state law by assessing overdraft fees on transactions authorized when sufficient funds were available and by charging multiple NSF fees when the same payment item was re-presented after an initial return. iQ Credit Union denied the allegations and any liability. The settlement comes amid a continuing wave of class-action litigation challenging overdraft and multiple-presentment NSF fee practices at banks and credit unions nationwide.
Originally reported by CU Today.