25 July 2024. Judge Elaine Lu of the Superior Court of California, County of Los Angeles has granted final approval to a $5 million settlement in a class action lawsuit against MUFG Union Bank, N.A. The settlement resolves claims that the bank unlawfully assessed overdraft fees on California consumer checking accountholders when their accounts had sufficient funds to pay transactions at the time of authorization.
The lawsuit challenges “Authorize Positive, Settle Negative” (APSN) bank fees, wherein banks allegedly improperly charge overdraft fees on debit card transactions that authorized on a positive balance but settled on a negative balance because of intervening charges. The litigation faced several legal hurdles, including challenges to the arbitration clause and a Judicial Reference process. Despite these obstacles, the plaintiffs, represented by Andrea R. Gold of Tycko & Zavareei LLP and co-counsel, persevered to secure this significant settlement.
The settlement class includes all MUFG Union Bank consumer checking accountholders in California who were assessed one or more APSN Fees during the period from October 19, 2013, through February 28, 2019.
“This settlement represents a significant victory for California consumers who were unfairly charged overdraft fees,” said Ms. Gold, one of the attorneys appointed as Class Counsel. “It sends a clear message to financial institutions about the importance of fair and transparent fee practices.”
The $5 million common fund will be distributed among eligible class members, providing meaningful compensation for the fees they were wrongfully charged. This resolution also raises awareness of predatory overdraft fee practices in the banking industry.
The case is Harrold v. MUFG Union Bank, N.A., Case No. BC680214 in the Superior Court for the State of California, County of Los Angeles, Central District.