Associated Bank to Pay $13 Million to Settle Overdraft Suits
An Associated Banc-Corp unit agreed to pay $13 million to settle consumer lawsuits accusing the Wisconsin bank of illegally charging excessive overdraft fees, according to court papers.
Officials of Green Bay, Wisconsin-based Associated Bank N.A. also agreed to pay the funds to wipe out “all claims that were or could have been brought” over the bank’s overdraft policies, lawyers for accountholder Pamela Harris said today in a federal court filing in Miami. Overdraft suits filed across the U.S. have been consolidated in that court for pre-trial proceedings.
The settlement comes almost three weeks after Bank of America Corp. (BAC), the second-largest U.S. bank by assets, won a judge’s approval of a $410 million settlement aimed at resolving similar claims over its overdraft policies.
“Since the settlement has not been approved and the lawsuit is still pending, we cannot comment beyond the statements” in court papers, Autumn Latimore, an Associated Banc-Corp (ASBC) spokeswoman, said in an e-mailed release.
Suits against more than 30 banks have been consolidated before U.S. District Judge James Lawrence King in Miami as part of a so-called multidistrict litigation. King has been overseeing pre-trial exchanges of information in the cases since June 2009. He still must give final approval to the Associated Bank accord.
Consumers contend that banks, including Bank of America, JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and Associated had policies that allowed them to debit account holders’ funds in a way that made it more likely customers would incur overdraft fees.
Last year, the Federal Reserve imposed rules prohibiting lenders from automatically charging fees when consumers have insufficient funds for electronic or debit transactions.
Associated Bank customers alleged in the suits the bank wrongfully engineered the way it posted debit-card transactions to maximize the chances account holders incurred overdraft fees.
Last week, officials of BOK Financial Corp. (BOKF) agreed to pay $19 million to resolve an account holder’s state court suit over the overdraft fee policy at its Bank of Oklahoma unit.
More than a half dozen other banks have agreed to pay a total of $469 million to resolve identical overdraft cases as part of the consolidation before King and in other state courts.
The consolidated case is In re Checking Account Overdraft Litigation, 09-02036, U.S. District Court, Southern District of Florida (Miami).
To contact the reporters on this story: Jef Feeley in Wilmington, Delaware at firstname.lastname@example.org; Susannah Nesmith in Miami at email@example.com.
To contact the editor responsible for this story: Michael Hytha at firstname.lastname@example.org.
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