Alabama credit union settles $3.7M OD fee class action suit

The Credit Union Times reported yesterday that a preliminary agreement is expected to be approved by a federal judge in October for a $3.7 million overdraft fee class action suit settlement with Redstone Federal Credit Union, the largest credit union in Alabama.

According to the report, the $7.6 billion credit union agreed to settle the lawsuit earlier this year. The suit alleged that members of the credit union were wrongfully charged overdraft and NSF fees from 2014 to 2021 when the CU violated its own account agreement by charging the fees based on available balances rather that actual balances. The suit also alleged that the CU charged multiple NSF fees on transactions that were re-presented for payment.

Redstone has not acknowledged, admitted, or conceded to the allegations in the suit, and disclaims any fault or liability, but said it agreed to the proposed settlement to avoid the risk, expense and disruption of further litigation.