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St. Anne’s Credit Union Unclear Reg E Disclosures Class Action

Federal Reserve Regulation E sets the conditions under which your bank or credit union can charge you overdraft fees on transactions that are not recurring. This class action alleges that St. Anne’s Credit Union (SACU) has violated these rules. The complaint claims that the document used by SACU to inform customers about these fees “provides ambiguous and inaccurate language to describe under what circumstances a customer is subject to an overdraft fee.”

The class for this action is all members and customers of SACU who have or had accounts with it, and who were charged an overdraft fee on a one-time debit card or ATM transaction, between March 18, 2017 and the date of class certification in this case.

Under Regulation E, the complaint says, SACU must “obtain informed consent, by way of a written standalone document that fully and accurately describes in an easily understandable way its overdraft service, before charging accountholders a fee for covering certain overdraft transactions.”

How, more specifically, does SACU violate these rules? SACU, the complaint says, “defines an overdraft in the opt-in disclosure agreement as when there is not enough money in the account to pay the transaction, but SACU pays it anyway.” However, what this does not reveal, the complaint says, is that the determination of “not enough money” is based not on the actual account balance but on “an artificially reduced calculation created by SACU’s internal bookkeeping called the ‘available balance,’ which deducts holds for future transactions.”

The complaint alleges that these deducted holds result in a negative balance that exists only on paper, when there is actually enough money in the account to pay the new transaction.

Heather Souza, the plaintiff in this case, has an account with SACU and has been charged overdraft fees on at least five occasions between September 2020 and January 2021. The complaint alleges, “All of these overdraft charges were assessed on the basis of [her] ‘available balance,’…”

The complaint claims that financial institutions make a lot of money on overdrafts and non-sufficient funds fees, earning $34.5 billion on overdrafts in 2018. The transactions involved may be quite small, with an average of $24, while overdraft fees range on average from $34 for bigger banks to $31 for smaller banks and credit unions.

The complaint quotes the Consumer Financial Protection Bureau as saying, in a press release, “Put in lending terms, if a consumer borrowed $24 for three days and paid the median overdraft of $34, such a loan would carry a 17,000 percent annual percentage rate (APR).”

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

St. Anne’s Credit Union Unclear Reg E Disclosures Complaint

March 18, 2021

Federal Reserve Regulation E sets the conditions under which your bank or credit union can charge you overdraft fees on transactions that are not recurring. This class action alleges that St. Anne’s Credit Union (SACU) has violated these rules. The complaint claims that the document used by SACU to inform customers about these fees “provides ambiguous and inaccurate language to describe under what circumstances a customer is subject to an overdraft fee.”

St. Anne’s Credit Union Unclear Reg E Disclosures Complaint

Case Event History

St. Anne’s Credit Union Unclear Reg E Disclosures Complaint

March 18, 2021

Federal Reserve Regulation E sets the conditions under which your bank or credit union can charge you overdraft fees on transactions that are not recurring. This class action alleges that St. Anne’s Credit Union (SACU) has violated these rules. The complaint claims that the document used by SACU to inform customers about these fees “provides ambiguous and inaccurate language to describe under what circumstances a customer is subject to an overdraft fee.”

St. Anne’s Credit Union Unclear Reg E Disclosures Complaint
Tags: Overdraft Fees, Your Bank