Sandia Laboratory FCU Improper Overdraft Fees Class Action

This class action brings suit against Sandia Laboratory Federal Credit Union (SLFCU) for charging overdraft (OD) fees when no overdraft has actually occurred. The complaint alleges that customers have been charged OD fees when their accounts had enough money in them to cover the transaction in question.

A Consumer Financial Protection Bureau study of overdraft programs shows that credit unions made $7.4 billion in OD fees in 2012. The complaint claims, “Overdraft and Non-Sufficient Funds fees now generate over 50% of all fees, and constitute 11.6% of net income for credit unions.

However, the complaint says, “More than 60% of the transactions that resulted in a large overdraft fee were for less than $50.” These fees, the complaint says, also fall primarily on “younger, lower-income, and non-white account holders…” It says that OD fees are therefor unfairly punitive.

Regulations have tried to limit the charging of OD fees. The complaint notes that “in 2010, the Federal Reserve Board enacted regulations which only allowed financial institutions the authority to charge overdraft fees on ATM and one-time debit card transactions if the institution first obtained the affirmative consent of the customer to do so.” Otherwise, the institution is supposed to decline the transaction.

Normally, when an institution approves a debit card transaction, the amount of that transaction is subtracted from the account balance. However, the complaint says, SLFCU does not assess OD fees based on this balance. “Rather, upon information and belief it is [based on] the balance in a customer’s account minus anticipated future debits (debits that may or may not occur. It might also take into account deposit holds.” The complaint claims this is contrary to SLFCU’s account documents and Opt-In Contract for its OD program.

In this case, for example, on January 21, 2019, plaintiff Jenny Rader was charged six overdraft fees of $25 each, for a total of $150, where her account statement show that the account held sufficient funds at the time of posting to pay the transactions.

The complaint reproduces her bank statement, which shows that the running balance on that day ranged from $297.03 to $50.25 but never went into negative numbers. Nevertheless, after each of six transactions she made, she was charged a $25 OD fee.

Similar incidents happened on other days, with the complaint reproducing her statements for these as well.

Two classes have been defined for this action.

  • The Positive Balance Class is all US residents who have or had accounts with SLFCU who were charged an OD fee when the balance in their checking accounts was enough to cover the transactions, between June 9, 2014 and the date of class certification in this case.
  • The Regulation E Class is all US residents who have or had accounts with SLFCU who were charged an OD fee for ATM or non-recurring debit card transactions between August 15, 2010 and the date of class certification in this case.
Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Sandia Laboratory FCU Improper Overdraft Fees Complaint

June 9, 2020

This class action brings suit against Sandia Laboratory Federal Credit Union (SLFCU) for charging overdraft (OD) fees when no overdraft has actually occurred. The complaint alleges that customers have been charged OD fees when their accounts had enough money in them to cover the transaction in question.

Sandia Laboratory FCU Improper Overdraft Fees Complaint

Case Event History

Sandia Laboratory FCU Improper Overdraft Fees Complaint

June 9, 2020

This class action brings suit against Sandia Laboratory Federal Credit Union (SLFCU) for charging overdraft (OD) fees when no overdraft has actually occurred. The complaint alleges that customers have been charged OD fees when their accounts had enough money in them to cover the transaction in question.

Sandia Laboratory FCU Improper Overdraft Fees Complaint
Tags: Additional charges in breach of contract, Overdraft Fees, Your Bank