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USAA Federal Savings Bank Time to Stop Autopayments Class Action

According to the complaint for this class action, Regulation E establishes “the basic rights, liabilities, and responsibilities” for consumers and financial institutions for electronic funds transfers under the Electronic Fund Transfer Act (EFTA). This class action brings suit against USAA Federal Savings Bank, alleging that USAA violates the act by imposing its own rules as to when customers can stop preauthorized electronic funds transfers.

The class for this action is all persons in Massachusetts who, between November 25, 2019 and November 25, 2020, (a) engaged in a consumer credit transaction with USAA Federal Savings Bank, and (b) signed an agreement for preauthorized loan payments to USAA that required five business days’ notice to terminate the preauthorized transfers.

Plaintiff Michael J. Barrett got a car loan from the USAA bank in September 2020. In connection with this loan, he received a number of documents, including an Authorization Agreement for Preauthorized Loan Payments.

The Authorization allows USAA to automatically take his loan payments out of Barrett’s account with Rockland Federal Credit Union. It requires his agreement to certain conditions for the termination of the autopay agreement: “I can terminate this authorization at any time, but USAA must receive notification from me of its termination at least five business days prior to the draft date to afford USAA reasonable opportunity to act on it.”

If the consumer provides less notice, the next scheduled transfer will be made, the agreement says.

However, the complaint quotes the EFTA as saying, “A consumer may stop payment of a preauthorized electronic fund transfer by notifying the financial institution orally or in writing at any time up to three business days preceding the scheduled date of such transfer.”

Regulation E states roughly the same thing: “A consumer may stop payment of a preauthorized electronic fund transfer from the consumer’s account by notifying the financial institution orally or in writing at least three business days before the scheduled date of the transfer.”

This is not simply a disagreement about terms, the complaint says. It quotes the EFTA as saying, “No writing or other agreement between a consumer and any other person may contain any provision which constitutes a waiver of any right conferred or cause of action created by this title.”

Thus, the complaint alleges, the agreement with USAA attempted to force Barrett to waive one of his rights under EFTA—the right to terminate the agreement with only three days’ notice.

Article Type: Lawsuit
Topic: News

Most Recent Case Event

USAA Federal Savings Bank Time to Stop Autopayments Complaint

December 25, 2020

According to the complaint for this class action, Regulation E establishes “the basic rights, liabilities, and responsibilities” for consumers and financial institutions for electronic funds transfers under the Electronic Fund Transfer Act (EFTA). This class action brings suit against USAA Federal Savings Bank, alleging that USAA violates the act by imposing its own rules as to when customers can stop preauthorized electronic funds transfers.

USAA Federal Savings Bank Time to Stop Autopayments Complaint

Case Event History

USAA Federal Savings Bank Time to Stop Autopayments Complaint

December 25, 2020

According to the complaint for this class action, Regulation E establishes “the basic rights, liabilities, and responsibilities” for consumers and financial institutions for electronic funds transfers under the Electronic Fund Transfer Act (EFTA). This class action brings suit against USAA Federal Savings Bank, alleging that USAA violates the act by imposing its own rules as to when customers can stop preauthorized electronic funds transfers.

USAA Federal Savings Bank Time to Stop Autopayments Complaint
Tags: Agreement Against Terms of Law, EFTA, Your Bank