American Savings Bank in Honolulu has agreed to a proposed $2 million settlement in a class-action lawsuit tied to its overdraft fees on debit card and ATM transactions.
The lawsuit, filed in Hawaiis first circuit court, sought damages stemming from the way that the $5.6 billion-asset bank posted transactions. The settlement, which both parties agreed to, resolves all claims in the litigation, a bank spokesperson told American Banker.
Rather than list debit card and ATM transactions chronologically, the lawsuit claimed that the bank organized them based on dollar amount from highest to lowest. Consequently, the quantity of overdraft fees charged to some accounts grew.
American Savings had asserted that its posting procedures were in accordance with federal law.
Anyone with a consumer checking account at the bank from Jan. 1, 2006 to June 27, 2011, who incurred more than one overdraft fee tied to a debit card or ATM transaction on a single banking day as a result of the alleged practices can partake in the settlement, the bank spokesperson said.
Numerous banks in recent years have settled class actions stemming from alleged practices that increased overdraft fees, including fellow Bank of Hawaii.