Commerce Bancshares Inc. said a unit of the company agreed to pay $18.3 million to settle consumer lawsuits accusing the Colorado bank of illegally charging excessive overdraft fees.
Officials of the unit, Denver-based Commerce Bank, agreed to resolve customers’ claims that the bank “improperly charged overdraft fees on certain debit card transactions,” according to a company filing today with the U.S. Securities and Exchange Commission.
“The bank, while admitting no wrongdoing, agreed to the settlement in order to resolve the litigation and avoid further expense,” officials said in the filing.
Commerce Bancshares, based in Kansas City, Missouri, is among more than a dozen banks across the U.S. that settled suits targeting overdraft policies which customers contend were engineered to generate fees unfairly.
Consumers said banks, including Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. had policies that allowed them to debit account holders’ funds in a way that made it more likely customers would incur overdraft fees.
The Federal Reserve last year prohibited lenders from automatically charging fees when consumers have insufficient funds for electronic or debit-card transactions.
Earlier this year, Bank of America, the second-largest U.S. bank by assets, agreed to pay $410 million to resolve similar claims over its overdraft policies.
Cases in Miami
Consumers’ claims against Commerce Bank were consolidated in federal court in Miami with other cases targeting the overdraft policies.
Suits against more than 30 banks have been gathered before U.S. District Judge James Lawrence King as part of a so-called multidistrict litigation. King has overseen pretrial exchanges of information in the cases since June 2009. The Commerce Bank accord still needs court approval.
Commerce Bancshares is a holding company with more than 370 banks in Missouri, Kansas, Illinois and Colorado and Oklahoma.
The case is Wolfgeher v. Commerce Bank, 1:10-cv-22017, U.S. District Court, Southern District of Florida (Miami). The consolidated case is In re Checking Account Overdraft Litigation, 09-02036, U.S. District Court, Southern District of Florida (Miami).