Mon, Feb 07, 2011 - Page 5 News List

BOA to settle its overdraft fee suit

AP, NEW YORK

The facade of BOA’s Washington headquarters is shown on Dec. 3.

Photo: AFP

Bank of America (BOA) has agreed to pay US$410 million to settle a federal lawsuit alleging the bank charged excessive overdraft fees.

The suit is one of several filed against several banks from plaintiffs in 14 US states, which were consolidated in a federal court in Florida. Other banks named in related suits include Wells Fargo and Citibank.

The US’ largest bank said in a court filing on Friday that it has reached a memorandum of understanding to settle the claims in the suit by paying US$410 million. The settlement is subject to court approval.

Consumers alleged the bank processed the payments in a way that caused more overdrafts.

Customers pay overdraft fees when they spend more money than remains in their accounts. The fees can reach US$35 apiece. Before US federal law changed this summer, banks frequently charged overdraft fees on numerous transactions in a single day.

Anne Pace, a spokeswoman for the Charlotte, North Carolina, bank, said on Saturday that it is “pleased to reach a fair resolution” to the case. BOA has already has addressed many related customer concerns, she said.

Wells Fargo is appealing a US$203 million judgment in a separate California case.

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