US Bancorp settles overdraft fee case for $55 mln

Mon Jul 2, 2012 11:00pm IST

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* Lenders accused of reordering transactions to boost fees

* Bank of America, JPMorgan, 12 others have settled

* US Bancorp says pleased to settle, has made changes

July 2 (Reuters) - US Bancorp, one of the 10 largest U.S. banks, has agreed to pay $55 million to settle lawsuits accusing it of imposing excessive overdraft fees on customers.

The settlement by the Minneapolis-based lender was revealed on Monday, six days after a $90 million accord with similarly-sized PNC Financial Services Group Inc was announced.

It is part of nationwide customer litigation against 35 lenders over the fees, which are typically assessed when customers overdraw their checking accounts by using debit cards.

Brought on behalf of millions of customers, the lawsuits accused banks of ordering transactions from largest to smallest, rather than processing them in chronological order. They said this let banks charge overdraft fees, which are typically $25 to $35, sooner and more often because account balances fell faster.

Fourteen lenders have settled, according to lawyers for the customers. Bank of America Corp's $410 million accord is the largest, followed by a $137.5 million settlement with Royal Bank of Scotland Group Plc's Citizens Financial unit and a $110 million settlement with JPMorgan Chase & Co.

US Bancorp's settlement requires approval by U.S. District Judge James Lawrence King in Miami. He oversees litigation over the fees, which was consolidated before him in 2009.

Teri Charest, a US Bancorp spokeswoman, said the bank is pleased to resolve the matter and has made changes in recent years in how it handles customer accounts.

Citigroup Inc, Wells Fargo & Co and Capital One Financial Corp are among the larger banks that have not settled.

The case is In re: Checking Account Overdraft Litigation, U.S. District Court, Southern District of Florida, No. 09-md-02036.

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