City Holding Co. in Charleston, W.Va., said Tuesday that it has agreed to pay $3 million to settle a class-action suit in which depositors accused the $2.7 billion-asset company of improperly assessing overdraft fees.

In a Securities and Exchange Commission, City Holding, the parent of City National Bank, also said that it will forgive $2.5 million of unpaid overdraft fees.

Depositors filed suit against City Holding in the Circuit Court of Kanawha County in July 2010. Judge Jennifer Bailey approved the settlement last week.

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