Citizens’ ‘Sustained Overdraft Fee’ Lawsuit Fails At First Circuit (Corrected)

A federal appeals court said that Citizens Bank N.A.’s overdraft fees were not interest under federal law, upholding a lower court ruling that dismissed a class action alleging the bank charged usurious interest rates on its overdraft products.

A divided three-judge panel of the U.S. Court of Appeals for the First Circuit on March 26 affirmed a federal district court’s ruling that “sustained overdraft fees” that the Philadelphia-based bank charges on its checking accounts did not constitute interest payments under the National Bank Act and regulations set by the Office of the Comptroller of the Currency.

Because of that, a ...