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Credit Union Excessive Overdraft Fees

Credit unions are not-for-profit organizations run cooperatively by members. They are different from banks in how they are run, but may still face many of the same legal issues as banks, including claims about mismanagement, consumer fraud and overdraft fees. Credit union lawsuits can be filed by members whose credit unions have not been properly managed or they may be filed by the National Credit Union Administration (NCUA), which has regulatory responsibility over them.


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Credit Unions and Banks

paperchainbanking Banks are for-profit institutions owned by a small group of individuals. Credit unions are actually not-for-profit organizations owned by their members. They may be chartered by federal or state governments. Federal credit unions are governed by the Federal Credit Union Act. In addition to being regulated by the NCUA, all credit unions are insured by the National Credit Union Insurance Fund.

The purpose of a credit union is to serve members, rather than to maximize profits. Surplus profits made by credit unions are paid to members as dividends. Account holders elect the board of directors and have a say in how the credit union is run. What most members notice, though, is that credit unions offer lower fees than banks.

Credit Union Lawsuits

Although credit unions are run cooperatively, they can still face lawsuits for mismanagement of funds, failing to disclose fee structures or other improper practices. In recent years, credit unions have been sued for director and officer mismanagement, deposit and withdrawal issues, wrongful foreclosure and employment, and training matters.

In 2017, a fair housing organization claimed that Colorado-based, Bellco Credit Union discriminated against women by denying them mortgages because they were on maternity leave. At about the same time an employee who had worked for 15 years for Park Community Credit Union sued, alleging that she was harassed and ultimately fired because she is gay.

New York Attorney General Eric T. Schneiderman filed suit against Southeast Financial Credit Union and The College Network alleging students who were given student loans for programs run through The College Network were not told their student loans were through a credit union.

The bulk of account holder-driven litigation, however, appears to focus on credit unions’ unfair practices with respect to overdraft fees. Account holder’s rights are protected by a variety of consumer protection laws.

Credit Union Overdraft Fees

creditunionMuch like banks, some credit unions have been hit with overdraft lawsuits, alleging their practices associated with overdraft fees are not properly disclosed. Among allegations made against credit unions are that the fees are based on available balance, not actual balance, the fee structures are not clearly disclosed and members do not receive accurate information about their available balances. For some credit union members, the confusion reportedly involves holds on debit transactions, which are not always made clear to members.

Credit unions have also faced allegations that they improperly reordered transactions to maximize income from overdraft fees. In July 2017, Florida-based MidFlorida Credit Union agreed to pay $2.375 million to settle a class action lawsuit regarding its overdraft fee practices.

As many as ten other credit unions were reportedly under investigation for deceptive overdraft fee practices as of June, 2017, only the month before. Among these were Meriwest Credit Union, Pentagon Federal Credit Union and Boeing Employees Credit Union.

Another class action lawsuit claims that Landmark Credit Union illegally assessed overdraft fees on transactions when there was enough money in the checking account to pay for the transactions.

In 2015, Orange County's Credit Union reportedly agreed to pay $1.8 million to settle complaints about unlawful overdraft fees.

Credit Union Excessive Overdraft Fees Legal Help

If you or a loved one has suffered similar damages or injuries, please click the link below and your complaint will be sent to a lawyer who may evaluate your claim at no cost or obligation.
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Washington State Employees Credit Union Settles Excessive Overdraft Fees Lawsuit for $2.99 Million
Washington State Employees Credit Union Settles Excessive Overdraft Fees Lawsuit for $2.99 Million
February 15, 2019
Tacoma, WA Washington State Employees Credit Union (“WSECU”) has agreed to pay $2.99 million to settle an excessive overdraft fees lawsuit. The class action lawsuit, Wodja v. Washington State Employees Credit Union, alleges that WSECU charged overdraft fees when members actually had enough money in their accounts. The settlement covers individuals affected by the credit union’s overdraft practices between 2009 and 2016 READ MORE

Credit Unions – A Case of Shutdown Shame?
Credit Unions – A Case of Shutdown Shame?
January 24, 2019
Washington, DC This is a good news/bad news story. The good news is that many banks and credit unions are offering financial relief to workers affected by the US government shutdown. The bad news is that the relief is designed to be temporary and limited. It also fails to address the widespread problem of excessive checking account overdraft charges that has been exposed through excessive overdraft fees lawsuits. These fees, like payday loan interest charges, cause great harm to the most vulnerable consumers READ MORE

Trustmark National Bank Latest Defendant in Excessive Overdraft Fees Lawsuit
Trustmark National Bank Latest Defendant in Excessive Overdraft Fees Lawsuit
December 21, 2018
Jackson, MS In the waning days of December 2018, Cryesha McDonald and Chantal Lewis filed an excessive overdraft fees lawsuit in the U.S. District Court for the Southern District of Mississippi. The lawsuit alleges that Trustmark National Bank assessed overdraft fees in violation of its contractual agreements with customers. Like similar lawsuits brought throughout the country, McDonald v. Trustmark National Bank claims that the bank charges fees on transactions that do not actually overdraft the account. Attorneys for the plaintiffs seek class action status for the lawsuit READ MORE
READ MORE Excecessive Overdraft Fee Settlements and Legal News
READ MORE Consumer Fraud Settlements and Legal News
READ MORE Financial Settlements and Legal News


Posted by
I worked for Landmark credit Union and I can 100% say they are some shady mo-fos. Body shamed by the male vp of the dept I worked in was the last tipping point of me leaving.I can absolutely believe they illegally obtained money from members. Bleed them dry of their 3bill in assets folks. I supports your movement for justice and change.

Posted by
Joan Frey
I am with Orange County’s Federal Credit Union and until now they have been on their best behavior. I have received my direct deposits a day before the pay date to ensure the money is part of my actual balance by midnight when any transactions come through. Now, the last few direct deposits have not come in on the day before. I can only surmise that they are heading down the same path of not depositing the money when they receive it so they can, again, charge overdraft fees. Not sure how to combat this other than to take my banking elsewhere.

Posted by
Where can I find an attorney to file a lawsuit against a credit union in Massachusetts.


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