Business Excellence Awards
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By PBN Staff
MIAMI - Toronto Dominion Bank agreed to pay $62 million to settle lawsuits accusing it of charging customers excessive overdraft fees. The Canadian lender’s TD Bank unit joined Bank of America Corp., JPMorgan Chase & Co. and several smaller lenders in settling litigation over the fees, which are usually assessed when customers overdraw their checking accounts.
TD did not admit liability in agreeing to the settlement, which was reached on May 8, according to a court filing. The settlement requires approval by U.S. District Judge James Lawrence King in Miami. He oversees overdraft cases against more than 30 lenders that were consolidated in 2009.
Customers accused banks of routinely processing transactions from largest to smallest rather than in chronological order. They said this caused overdraft fees, typically $25 to $35 per transaction, to pile up faster because it caused their balances to go negative sooner. In 2010, the U.S. Federal Reserve barred banks from charging overdraft fees on electronic and debit card transactions without advance customer approval.
Bank of America’s $410 million settlement won final court approval last May, and is the largest to date. Other settlements include $137.5 million by Royal Bank of Scotland Group Inc.’s Citizens Financial unit and $110 million by JPMorgan.