Bloomberg News

Capital One Agrees With Overdraft Plaintiffs to Seek Mediation in Lawsuit

March 01, 2012

Capital One Financial Corp. (COF) and customers who claim the bank gouged them on overdraft fees for checking accounts agreed to suspend their litigation while they try to mediate the dispute, court records show.

“The parties have agreed to engage in private mediation in an effort to resolve this case without further litigation,” lawyers for the bank and customers said today in a filing in federal court in Miami. They agreed to suspend court filings on whether to certify the case as class-action lawsuit.

At least 30 banks have cases in Miami before U.S. District Judge James Lawrence King, who has consolidated the cases. The customers say the banks reorder debit-card transactions in their computers to maximize overdraft fees. JPMorgan Chase & Co. (JPM), the biggest U.S. bank by assets, has reached a preliminary agreement to pay $110 million to settle litigation.

Bank of America Corp., the second-biggest U.S. bank by assets, agreed last year to pay $410 million without admitting liability. The accord won court approval despite objections that the amount was too little for customers and that lawyers were paid too much.

Union Bank NA agreed to a $35 million settlement with customers in November. An Associated Banc-Corp. (ASBC) unit, Associated Bank, agreed in November to pay $13 million.

The case is In re Checking Account Overdraft Litigation, 09-md-02036, U.S. District Court, Southern District of Florida (Miami).

To contact the reporters on this story: David Voreacos in Newark, New Jersey, at dvoreacos@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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