Digital Federal Credit Union Overdraft Fees
September 2019: A federal judge preliminarily approved a settlement agreement that, among other things, would establish a $1.8 million settlement fund from which class members would automatically receive a pro rata distribution. The credit union also agreed to change the way it assesses overdraft fees, but only for a period of three years, as well as waive overdraft fees that were improperly assessed on the available balance instead of the actual balance if the fees were not already collected. A final fairness hearing is scheduled for December 19, 2019.
June 2018: A class-action lawsuit was filed against Digital Federal Credit Union for allegedly promising that it only charges overdraft fees when customers do not have enough money in their checking accounts to pay for a transaction when, according to the plaintiffs, the credit union fails to adequately disclose that it charges overdraft fees based on an artificial balance that deducts the holds placed on pending debit card and deposit transactions instead of the actual balance in the account. Plaintiffs also claim that the credit union represents that it does not assess such fees based on ATM and non-recurring debit card transactions unless customers “opt-in” to the overdraft service when, according to the complaint, it charges overdraft fees on ATM and non-recurring debit card purchases without customers’ consent, as required by federal regulations. (Salls et al v. Digital Federal Credit Union, Case No. 18-cv-11262, D. Mass.)