BMO Harris Bank Agrees to Pay $9.4 Million to Settle Overdraft-Fee Lawsuit

Bank of Montreal (BMO)’s BMO Harris Bank agreed to pay $9.4 million to settle a lawsuit that accused the Chicago lender of illegally charging excessive overdraft fees, according to court papers.

The settlement reached Nov. 30 ends the bank’s role in the litigation, according to a filing yesterday in federal court in Miami. Overdraft suits filed across the U.S. have been consolidated in that court for pretrial proceedings.

Account holder Stephanie Blahut accused the bank of manipulating and reordering debited transactions in accounts from highest to lowest to increase the number of overdraft fees it can charge. Blahut sued seeking to represent all Harris Bank customers.

Suits against more than 30 banks have been consolidated before U.S. District Judge James Lawrence King in Miami in so- called multidistrict litigation. King has been overseeing pretrial exchanges of information in the cases since June 2009. The Harris Bank settlement still requires the judge’s approval.

The consolidated case is In re Checking Account Overdraft Litigation, 09-02036, U.S. District Court, Southern District of Florida (Miami).

To contact the reporter on this story: Sophia Pearson in Philadelphia at spearson3@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net