Bank Overdraft Fee $3.46 Million Class Settlement Gets Final OK

A $3.46 million class settlement resolving allegations that Community Bank improperly charged certain overdraft fees won final approval from a New York federal court.

The settlement value is substantial given the attendant risks of litigation, Judge Mae D’Agostino of the U.S. District Court for the Northern District of New York said Wednesday.

Tina Thompson and Scott Doxey alleged that overdraft fees charged when there was a sufficient available balance in a customer’s account at the time the transaction was authorized, but an insufficient available balance at the time the transaction was presented to the bank for payment and posted to the customer’s account, violated the account agreement.

The plaintiffs also alleged Community Bank wrongfully assessed overdraft fees as a result of account verification processes that resulted in no change to the account balances.

The deal covers current or former customers who were assessed the overdraft or account verification fees from Jan. 1, 2015, to Dec. 31, 2019.

There were no objections among the 46,404 class members, and two class members opted out, the final approval order said.

The court also approved the plaintiffs’ attorneys’ fee request for 33.33% of the settlement, roughly $1.15 million.

“Class Counsel obtained a favorable settlement in an efficient manner,” the court said. Additionally, as result of this litigation, Community Bank has improved its disclosures of the challenged practices, the court said.

Class representatives won theThompson v. Cmty. Bank, N.A., N.D.N.Y., No. 8:19-cv-00919, 9/8/21 court’s approval for their 5,000 service awards.

No money will revert to the bank. If there is money remaining from uncashed checks, the parties will suggest a cy pres beneficiary for the court’s approval.

Kopelowitz Ostrow Ferguson Weiselberg Gilbert PA, Dreyer Boyajian LLP, and Kaliel Gold PLLC represented the plaintiffs. Katten Muchin Rosenman LLP and Bond Schoeneck & King PLLC represented Community Bank.

The case is Thompson v. Community Bank, N.A., N.D.N.Y., No. 8:19-cv-00919, 9/8/21.