On July 25, a bank agreed to a class action settlement relating to overdraft fees in a case filed in May 2022. If the court approves, the settlement will provide $1.5 million to the class via a settlement fund. The lawsuit alleged that the bank improperly charged overdraft fees on debit card transactions that were authorized when sufficient funds were in the account but that resulted in a negative account balance when the transactions settled ­­­­— a practice the bank called “Authorize Positive, Settle Negative” (APSN).

In addition to the $1.5 million award to the settlement class, the bank also agreed to cease its APSN practice for at least five years. The settlement class encompassed all holders of the bank’s consumer checking accounts, specifically on their charged overdraft fees from APSN transactions made on or before April 2020. It excluded the members of a settlement class from another case. The settlement will be subject to final approval by the U.S. SDNY.