BIRMINGHAM, Ala. – A federal court here agreed yesterday to dismiss two more class action suits challenging credit union practices on overdrafts, the fifth and sixth suits to be dismissed in the past two weeks.
The dismissal of the suits against America’s First FCU and Legacy Community FCU come after the Alabama credit unions argued that membership agreements signed by the plaintiffs in the case require members to arbitrate and not litigate disputes with their credit unions, and also bar class action suits.
The credit union wins follow recent dismissals of overdraft suits against California’s Xceed Financial FCU, Educational Employees FCU, Kern Schools FCU and SchoolsFirst FCU. Suits are still pending against California’s Star One CU and Alliant CU and Alabama Telco FCU.
Each of the suits claimed the credit union engaged in unfair business practices by reordering debit transactions, with credit unions paying off debits from largest to smallest, instead of by date, in order to create more overdrafts and the fees that come with them.
Similar suits against a variety of banks have resulted in numerous banks paying multi-million dollar settlements.
