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Bank of America settles excessive overdraft fee lawsuit

By Aman Kakar

[JURIST] Bank of America (BOA) [corporate website] has reached a $410 million settlement in a class action suit accusing the bank of excessive overdraft fees, according to documents submitted Friday in the US District Court Southern District of Florida [official website]. BOA is among more than two dozen US, Canadian and European lenders named as defendants in the class action lawsuit, which consolidated claims across the country in 2009. In their amended complaint [text, PDF], the plaintiffs claimed that BOA's practices were deceptive in that they did not reasonably notify customers that they had the option of opting out of the overdraft scheme and declining transactions. The complaint also alleged that BOA's excessive fees disproportionately effect low-income customers. A judge must now approve the settlement agreement.

BOA has recently been the target of several lawsuits. In January, plaintiffs filed a lawsuit [JURIST report] against Countrywide Financial Corporation [NYT backgrounder], a BOA subsidiary, in New York State Supreme Court [official website] alleging widespread fraud that resulted in substantial financial losses. Arizona Attorney General Terry Goddard filed a lawsuit in mid-December against BOA for misleading customers [JURIST report] in mortgage modification and foreclosure practices. Earlier in the month, the US Securities and Exchange Commission (SEC) [official website] reached a $137 million settlement agreement [JURIST report] with BOA over fraud charges [order, PDF] in a lawsuit that claimed BOA used anti-competitive bidding processes with 20 state municipalities. In June, BOA subsidiary Countrywide Home Loans, Inc. reached [JURIST report] a $108 million settlement agreement [text, PDF] with the Federal Trade Commission (FTC) [official website] in response to a lawsuit that charged it with collecting excessive fees from homeowners facing foreclosure.

Full post as published by JURIST - The Paper Chase on February 08, 2011 (boomark / email).