The Bank was embroiled in a suit with its customers for over $1 bln in overdraft fee charges. Yesterday in Miami the court ruled in favor of the acountholders
(Bloomberg)U.S. District Judge James Lawrence King in Miami yesterday approved the accord between the bank and about 1 million account holders, who may receive as much as 45 cents on the dollar on their claims, their lawyers said. That still amounts to a fraction of the overdraft fees they paid, the lawyers added.
The bank had earlier eased charges introduced on its debit cards as Virginia based Credit unions (CUO) advertising concomitant ly on current accounts with rewards for using the account made many new customers on the weekend when the fees was introduced. One of them cooked up an ad spending just $35 to be on the column when BofA was reported for new Debit Cards. Banks that receive 300 new customers in a month reported signing a 100 in the same day
The Fed had changed the rules on overdraft in 2009 itself
The Federal Reserve last year established rules barring lenders from automatically charging fees when consumers have insufficient funds for electronic or debit transactions.
The bank’s customers however have to fork out however to their lawyers to $123 mln of the settlement
Bank of America didn’t admit any liability in the settlement.
The bank has changed its transaction processing policies since the cases were filed in 2009. Consumers are no longer charged overdraft fees on debit transactions, and they pay smaller penalties than previously for overdrawing their checking accounts.
Along with the settlement, King approved $123 million in legal fees for customers’ lawyers.
BofA has to continue large scale asset sales, having begun in earnest more than a year and a half back. Having sold the 5% CCB stake, it will now sell a part of the remaining 5% stake in China Construction Bank worth $9.2 bln according to Reuters
It is also selling a few of its other Non Credit Card Assets like its largest Pizza Hut franchises it co owned till date to clear the balance sheet. NPC intl owns 1 in 4 Pizza Hut franchises in the USA. The Olympus stake was bought for $615 mln by Merrill Lynch and will net the bank $400 mln when Olympuxs Partners purchases the same
The Debit card fee imbroglio resulted in an inventive Bank Transfer Day celebrated by many Occupy Wall Street Supporters over the weekend other banks like Citi and JP Morgan had earlier introduced much reduced fees on their debit cards limiting charge waiver requirements to a low bar
(BTD)..participants in the Bank Transfer Day Rally in downtown Los Angeles still encouraged a move to smaller, local banks and credit unions on Saturday.
According to theHuffington Post, Bank Transfer Day began with a personal Facebook post by Kristen Christian, a 27-year-old Los Angeles gallery owner, that read, “If you don’t want to pay the likes of Bank of America $5 a month to access your money via debit card, just transfer your cash to your friendly, local credit union.”
TD Bank of Canada bought BofA’s Canada Credit card assets earlier
- Bank of America could pay $410 million to settle overdraft fees lawsuit (oregonlive.com)
- BofA May Hundreds Of Millions To Settle Overdraft Suit (huffingtonpost.com)
- Golly, why would anyone want to leave Bank of America? (firedoglake.com)
- Lawyer: 13.2 million Bank of America customers may deserve overdraft refunds (mercurynews.com)