Primary plaintiff Mary Gray alleges in a class action lawsuit that Los Angeles Federal Credit Union fraudulently charged overdraft fees to members who had explicitly stated they did not want or formally requested overdraft protection for a couple of specified transactions. Los Angeles Federal Credit Union allegedly charged the improper overdraft fees on ATM and non-recurring debit card transactions. Under state and federal law, financial institutions are not allowed to assess overdraft fees for ATM and non-recurring debit card transactions, unless an account holder asks for overdraft protection.
This means Los Angeles Federal Credit Union violated consumer opt in laws. Gray asserts the involuntary opting in of account holders violates federal banking regulations and state consumer laws. The settlement does not legally mandate that the credit union admit to the fraudulent overdraft charges. As such, Los Angeles Federal Credit Union continues to deny every allegation made in the class action lawsuit. However, the credit union has agreed to a class action settlement that creates a fund in excess of $350,000. Part of the fund goes directly to eligible class members.
What You Need to Know
Class members do not have to do anything to receive class action settlement compensation. As of May 11, 2017, Los Angeles Federal Credit Union has identified every class member who qualifies for a settlement payment. According to the class action settlement website www.LosAngelesFederalCreditUnionOverdraftSettlement.com, “Class Members include all Los Angeles Federal Credit Union account holders who, between Sept. 16, 2011 and March 23, 2017, were assessed an overdraft fee on a non-recurring debit card or ATM transaction, even though they had not opted into the credit union’s overdraft protection for those types of transactions.” Class members have until May 15, 2017 to object to any provisions of the settlement, as well as opt out of class membership.
Current credit union members will receive a credit to their affected accounts. Former credit union members can expect to receive a check in the mail. The class action settlement also forces Los Angeles Credit Union to change its overdraft protection policies to exclude ATM and non-recurring debit card transactions. Class members might receive up to $20.15 for each overdraft charge.
The class action lawsuit known as Mary Gray v. Los Angeles Federal Credit Union, Case No. 2:15-cv-07266, in the U.S. District Court for the Central District of California has a final hearing scheduled for June 26, 2017. Richard D. McCune and Jae (Eddie) K. Kim of McCune Wright Arevalo and Taras Kick of The Kick Law Firm APA represent the class counsel in the lawsuit. The defense counsel includes attorneys from Katten Muchin Rosenman LLP.
