Overdrafts continue to trip up financial institutions

Overdraft litigation is alive and well. Recently, the United States District Court of New Hampshire refused to dismiss a punitive class action brought against Northeast Credit Union involving claims that the credit union did not adequately disclose the way in which it determines how much money is available in a member’s account. As a result, the member claims that persons are made liable for overdraft charges to which the credit union is not entitled. This litigation is by no means unique to credit unions but it does represent an ongoing problem that can be mitigated if the appropriate disclosures are in place.

The facts in Walbridge v. Northeast Credit Union, No. 17-cv-434-JD, 2018 BL 77521 (D.N.H. Mar. 07, 2018) are fairly typical. Walbridge alleges that on March 15, 2016, he had an actual balance in his Northeast checking account [*2] of $111.09. He made a debit card payment of $32.43, which left a balance of $78.66. Northeast, however, determined that he had insufficient funds and charged an overdraft fee of $32.00. Northeast then assessed additional overdraft fees of $32.00 on March 29 and March 30, 2016. Walbridge contends that the overdraft fees were improper.


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