Bank of America
The refund could average more than $200 per affected customer. It could be much more for the frequently overdrawn. B of A should be looking for you to issue a refund, even if you weren't involved in the lawsuit, if it charged you an overdraft fee on a checking or debit-card transaction going back as far as 2001.
Why so generous? It's a settlement. B of A and a number of other banks -- including Citigroup
Can you believe B of A would go to the trouble of reordering transactions so it could jack up overdraft fees? Yeah, me, too. Seems a bit shameful.
B of A denies the allegations, but said it was "pleased to reach a fair resolution to this matter." Apparently there is enough evidence that transactions were not ordered coincidentally. And if B of A were innocent, you'd think they should be able to prove it by spending a whole lot less than $410 million.
While the settlement is good news for bank customers, it is one more nail in the coffin for bank profits. Dodd-Frank has hit banks in the fees. According to the Federal Deposit Insurance Corp., deposit-account fee income for the industry fell 21% year over year in the fourth quarter. That, and weak loan demand, contributed to a 40% drop in the banking industry's pre-provision earnings in the first quarter.
The $410 million settlement is significant to B of A's bottom line, too. The company's pre-tax earnings (including "unusual items") over the last year are a loss of $2.93 billion. Other banks could find themselves paying up to settle similar allegations. A federal judge has already ruled against Wells Fargo.
Looks like we could be seeing more of these settlements from banks in the near future.
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