BancorpSouth in Tupelo, Miss., has agreed to settle a lawsuit tied to how it determines overdraft fees on debit card and ATM transactions.
The $13.7 billion-asset company disclosed in a regulatory filing Tuesday that its bank will pay $24 million to create settlement fund. The company said it expects to record a one-time expense of $16.5 million when it reports fourth-quarter results later this month.
The lawsuit, filed in U.S. District Court for the Northern District of Florida, took issue with BancorpSouth's policies tied to the posting order of certain transactions. The proposed settlement is subject to preliminary and final court approval and should be finalized by Jan. 22.
BancorpSouth said it viewed the settlement as a compromise and a way to avoid more litigation expense, adding that it is "not in any way an admission of liability, fault or wrongdoing."
Numerous banks in recent years have settled class actions based on predatory overdraft policies. Nearly all of them have been settled, according to the filing. BancorpSouth also settled an overdraft case in 2012, where it agreed to cap the number of overdraft fees a customer could incur in a day.