Tuesday, February 07, 2012

JPMorgan Chase To Pay $110 Million To Settle Accusations Of Excessive Overdraft Fees

By Jonathan Stempel

Feb 6 (Reuters) - JPMorgan Chase & Co has agreed to pay $110 million to settle consumer litigation accusing it of charging excessive overdraft fees.

The largest U.S. bank by assets joined Bank of America Corp and several smaller lenders in settling their portion of the nationwide litigation over the fees, which are typically assessed when customers overdraw their checking accounts.

Consumers had accused more than 30 lenders of routinely processing transactions from largest to smallest rather than in chronological order.

This can cause overdraft fees, typically $25 to $35, to pile up because account balances fall faster when larger transactions are processed first. Critics say this disproportionately burdens customers with lower incomes and balances.

JPMorgan's settlement in principle was disclosed in a filing on Friday with the U.S. district court in Miami.

The settlement requires negotiation of final documentation and approval by U.S. District Judge James Lawrence King, who oversees the nationwide litigation. It also calls for an unspecified change to JPMorgan's overdraft practices.

Posted via email from Jack's posterous

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