Court OKs JPMorgan fee pact; Capital One talks fail
05/25/2012| 05:59pm US/Eastern
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(Reuters) - JPMorgan Chase & Co (>> JPMorgan Chase & Co.) won preliminary court approval of its agreement to pay $110 million to settle nationwide litigation accusing it of charging excessive overdraft fees.
(Reuters) - JPMorgan Chase & Co (>> JPMorgan Chase & Co.) won preliminary court approval of its agreement to pay $110 million to settle nationwide litigation accusing it of charging excessive overdraft fees.
The settlement would resolve lawsuits brought on behalf of more than 1 million people over the fees, which are assessed when customers overdraw their checking accounts by using their debit cards.
Consumers accused more than 30 lenders of trying to boost overdraft fees, which are typically $25 to $35, by reordering transactions from largest to smallest rather than processing them in chronological order.
This can cause fees to be incurred sooner and more often because account balances fall more quickly.
Roughly one-third of the lenders have settled. Several others have agreed to mediation.
On Friday, lawyers for Capital One Financial Corp (>> Capital One Financial Corp.) and the plaintiffs said efforts to mediate their dispute had failed, and that court proceedings that had been put on hold pending the mediation will resume.
In a order dated Thursday, U.S. District Judge James Lawrence King in Miami, who oversees the nationwide litigation, called the JPMorgan settlement fair, reasonable and adequate, and certified a class of plaintiffs.
Customers may opt out of the settlement. A final hearing is scheduled for December 10.
Bank of America Corp's (>> Bank of America Corp) $410 million settlement is the largest in the overdraft litigation.
Other banks to settle include Royal Bank of Scotland Group Plc's (>> Royal Bank of Scotland Group plc) Citizens Financial unit, which agreed to pay $137.5 million, and Toronto Dominion Bank (>> Toronto-Dominion Bnk), which agreed to pay $62 million.
The Citizens and TD accords await court approval.
The case is In re: Checking Account Overdraft Litigation, U.S. District Court, Southern District of Florida, No. 09-md-02036.
(Reporting by Jonathan Stempel in Toronto; Editing by Lisa Von Ahn, Gary Hill)
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