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Credit Union Excessive Fees Lawsuits Could Be “Tip of the Iceberg”

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Lakeland, FLCredit unions are increasingly coming under fire for excessive overdraft fees, in the same way that major banks have been taken to task for misdeeds such as reorganizing transactions to maximize fees. In October plaintiff Martha Towner filed a Credit Union Excessive Overdraft Fees lawsuit alleging 1st MidAmerica Credit Union charged overdraft fees improperly.

But that’s just the tip of the iceberg, according to various media reports. Since September, at least a dozen credit unions have been hit with class-action Excessive Overdraft Fees lawsuits in nine states, with various pundits weighing in with the observation that this could be the tip of the iceberg.

Towner, in her class-action lawsuit (Towner et al v. MidAmerica Credit Union, and Does 1-100, case No. 3:15-cv-01162, filed October 20, 2015 in US District Court, Southern District of Illinois), claims that her credit union charged her overdraft fees on various transactions, even though there were sufficient funds in her checking account to cover those transactions.

Tracy Fry is another plaintiff who takes exception to the practices of credit unions. Fry asserts in her Credit Union Lawsuit filed in November that MidFlorida Credit Union based in Lakeland charged overdraft fees based on members’ available balances, rather than actual balances. Not only does Fry assert that such methodology is improper, but also constitutes a breach of MidFlorida’s opt-in agreement and was not consistent with disclosures issued to members.

MidFlorida, it should be noted, serves 220,000 members and boasts $2.3 billion in assets.

Plaintiffs assert that credit unions with such assets do not need to be nickel-and-diming their members in such fashion. Pundits and industry watchers, meanwhile, say that what we’re seeing is just the tip of an iceberg that will soon reveal itself.

Numerous Credit Union Excessive Overdraft Fees Lawsuits have alleged that credit unions altered the sequence of transactions to maximize fees. While in some cases this has yet to be proven, other lawsuits - such as those of Fry and Towner noted above - accuse the credit unions of misleading practices while basing fees on available balances, rather than actual balances. Industry watchers assert that such lawsuits are not necessarily alleging the credit union is doing anything blatantly improper, but rather is accusing the credit union of misleading conduct.

Attorneys representing the interests of credit unions are urging such organizations to review their disclosures to ensure everything is buttoned-down, thus avoiding any fee, debit or other activity that might be viewed as misleading.

Plaintiffs, on the other hand, aren’t waiting for credit unions to get their respective houses in order. If they have been misled or wronged with unnecessary fees, the credit union is going to hear about it through the plaintiff’s Excessive Overdraft Fees Lawsuit lawyer.


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Posted by

Credit union - they take automatic deductions while closed not allowing cash deposits until they are opened resulting in overdraft fees.
example. Monday was a holiday, auto insurance automatic insurance was due to be auto, taken out on Tues. problem credit union closed on Monday unable to make cash deposit, so tues. credit union didn't open until 10 am . So no cash deposit could be made until 10 am .

At 10am on Tuesday a deposit of $ 30 made to cover extra needed! A few days later Credit union mailed a notice charging an overdraft fee of $30 plus because they took out money electronically at 7:30 am before they opened ( which is not the business day hours) to pay auto ins automatic payment due on tues. if the bill was due on
Tues to be withdrawn shouldn't it be during business hours as the only time cash can be deposited. Checks are held for a few days to 10 days do type of deposit would be cash!

Ps that fee found then cause another withdrawal to bounce because hey take their money out first! Which are other cases!

Posted by

Another way they can CREATE overdrafts is to process debits (checks) BEFORE they process credits (deposits) within a given day.


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