City National Bank and Trust Overdraft and NSF Fees Reg E Class Action

Banks may charge overdraft (OD) fees on one-time debit and ATM transactions provided they meet the requirements of Federal Reserve Regulation E, with proper disclosures to, and consent from, the customer. However, the complaint for this class action alleges that the City National Bank and Trust Company of Lawton, Oklahoma does not do this. The bank should therefore not be charging customers OD fees, the complaint says.

Regulation E allows banks to charge OD fees on non-recurring debit or ATM transactions only if they do certain things:

Provide an opt-in disclosure agreement that is complete, clear, accurate, and easily understandable.

Provide the disclosure agreement in a stand-alone document.

Get the customer’s verifiable affirmative consent.

Reg E does not even allow banks to encourage customers to opt in, for example, offering advantages if customers do or disadvantages if they don’t.

The complaint alleges, “upon information and belief,” that City National’s disclosures are not presented in a stand-alone document, “that accurately and in an easily understandable manner describes City National’s overdraft services including, but not limited to, failing to state or clearly describe that an overdraft occurs when the ‘available balance’ is below zero…”

In addition, the bank charges a fee for declined debit card transactions, which the complaint says is “an almost unheard[-]of practice in the financial industry.” This, the complaint claims, constitutes offering a disadvantage for not opting in.

Also, the complaint claims City National charges customers more than one non-sufficient funds (NSF) fees on a single item. This may happen when an item is returned unpaid, then presented for payment a second time by the merchant “through no action of the accountholder.”

Finally, the complaint claims City National removes the amount of an “unpaid” transaction from the account, then restores it the next day. However, “by debiting the acccoutholder’s money in the interim” it makes it possible that subsequent items will incur OD or NSF fees.

Three classes have been defined for this action:

The Regulation E Class is all customers who have or had accounts with City National who were charged an OD fee on a one-time debit card or ATM transaction, between January 14, 2020 and the date the class for this case is certified.

The Repeat NSF Class is all customers who have or had accounts with City National who were charged more than one NSF fee or an NSF and then an OD fee for the same item, between January 14, 2016 and the date the class for this case is certified.

The Pay All, Next Day Return Class is all customers who have or had accounts with City National who were charged an OD or NSF fee, after an initial item was processed as paid, leaving insufficient funds in the account for other items that would otherwise not have caused a negative balance OD or NSF fee if the initial items had been processed as unpaid or returned initially, between January 14, 2016 and the date the class for this case is certified.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

City National Bank and Trust Overdraft and NSF Fees Reg E Complaint

January 14, 2021

Banks may charge overdraft (OD) fees on one-time debit and ATM transactions provided they meet the requirements of Federal Reserve Regulation E, with proper disclosures to, and consent from, the customer. However, the complaint for this class action alleges that the City National Bank and Trust Company of Lawton, Oklahoma does not do this. The bank should therefore not be charging customers OD fees, the complaint says.

City National Bank and Trust Overdraft and NSF Fees Reg E Complaint

Case Event History

City National Bank and Trust Overdraft and NSF Fees Reg E Complaint

January 14, 2021

Banks may charge overdraft (OD) fees on one-time debit and ATM transactions provided they meet the requirements of Federal Reserve Regulation E, with proper disclosures to, and consent from, the customer. However, the complaint for this class action alleges that the City National Bank and Trust Company of Lawton, Oklahoma does not do this. The bank should therefore not be charging customers OD fees, the complaint says.

City National Bank and Trust Overdraft and NSF Fees Reg E Complaint
Tags: Additional charges in breach of contract, Insufficient or Non-Sufficient Funds Fees, Overdraft Fees, Your Bank