I have heard ripplings of a major United States Bank having recently lost a law suit. The issue revolves around Social Security benefits being "protected" funds and therefore, it is not permissible for banks to recover overdraft or NSF fees from Social Security benefits without prior consent from the customer. Is this an awful rumor or is there any truth to this story?

I don't know if the Lopez case is what you are referring to. It was decided (well, the original decision was reversed) in August of 02, so it's pretty old. Here is a link to an article Mary Beth wrote about it. I have not heard of any new big cases on the issue recently.

A colleague found the article, Feb. 27, 2004, finance.news.com.au, jury recently awarded customers in California law suit.

I think this must be the article you are referring to.

Here is a good discussion on it in the threads a couple of weeks ago. I must have missed this one.

Our Risk Management and Operations folks are eyeing this very closely - we offer Pinnacle's Bounce Protection product. Sounds like others could face the same music.

MB - any chance you could check this out and let us know, since you wrote the article about it 2 years ago?

If this about the BofA case, they just got a tentative ruling that they may be liable for $372 MILLION. Don't have more details right now.

BofA announced it yesterday in an SEC filing:

ITEM 8.01. OTHER EVENTS.

In Paul J. Miller v. Bank of America, N.A., the trial court denied plaintiffs’ motion for a preliminary injunction which had been sought by plaintiffs after the February 2004 jury verdict.

On October 13, 2004, the trial court issued its tentative ruling on the two claims tried to the court at the conclusion of the February 2004 jury trial, ruling on both claims against Bank of America, N.A. (the “Bank”), a wholly-owned subsidiary of Bank of America Corporation (the “Registrant”). The tentative ruling would award the plaintiff class restitution in the amount of $284 million, plus interest and attorneys’ fees. The tentative ruling would also award class members who suffered substantial emotional or economic harm an additional $1,000 penalty but leaves unclear to which class members this award would apply. The tentative decision also includes injunctive relief.

The trial court has set a November 30, 2004 hearing to consider objections to its tentative ruling, with a final judgment to be entered thereafter. The Bank will appeal any adverse final judgment and move to stay any injunction pending appeal.

Kaybee, can you provide a link or other relevant info on where your read this? Our management would like to read it in its entirety. Thanx

This may be it.