BancorpSouth agrees to pay $24 million settlement in lawsuit on how it charges overdraft fees to cus
Daily Journal
TUPELO, MS
BancorpSouth last week said in an SEC filing it will pay $24 million to settle a lawsuit related to how it determines overdraft fees on debit card and ATM transactions.
The company will record a one-time expense of $16.5 million during its fourth-quarter earnings report, due later this month.
The lawsuit, filed in U.S. District Court for the Northern District of Florida in May 2010 by an Arkansas customer of the bank, challenged the way BancorpSouth posted the order of debit card and ATM transitions.
The suit said that BancorpSouth posted the transactions from higher amounts to lower amounts, rather than chronological order.
The lawsuit was similar to others levied against banks across the nation. Twenty-six of those 29 class-action suits have been settled, according to the SEC filing.
BancorpSouth said it viewed the settlement as a compromise and a way to avoid more legal expenses. It said the settlement is “not in any way an admission of liability, fault or wrongdoing by the bank.”
In addition to the $24 million settlement fund, BancorpSouth will pay a maximum of $500,000 for fees and costs to the administrator of the fund. Any expenses or fees over that amount will come from the settlement fund.
The court must still give preliminary and final approval of the settlement agreement by Jan. 22.
BancorpSouth also settled an overdraft lawsuit in 2012 for $1.75 million.
That lawsuit said BancorpSouth resequenced transactions to maximize the number of non-sufficient funds fees and overdraft fees by processing the largest transaction first instead of processing the transactions as they are received.
BancorpSouth admitted no wrongdoing in that case as well.
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