Class Action Lawsuit Involving ACH Transfer Fees - How to Mitigate Your CU's Risk

CUNA Mutual Group has issued a Risk Alert in connection with a class action lawsuit filed against Bank of America earlier this year on behalf of customers who were assessed fees for automated clearinghouse (ACH) transfers.

Bank of America charged $3 to $10 for ACH credit transfers depending on the timing of the transfer and the type of account involved. Plaintiffs’ attorneys assert that these fees are improper and should be refunded.

Unlike Overdraft / NSF fee lawsuits, the Bank of America case does not allege that the financial institution failed to disclose the fees or how and when the fees are assessed. Instead, it alleges that Bank of America should have disclosed cheaper options for initiating ACH credit transfers (outbound transfers) through online banking. By failing to disclose these options, the complaint alleges that Bank of America was engaged in unfair or deceptive practices.

Although this may be the first in this type of class action lawsuit involving ACH transfer fees; credit unions should take notice and review disclosures, postings on websites promoting this service as well as fee schedules to address this potential risk.

If your credit union charges a fee for ACH transfers, consider these risk mitigation tips:

• Ensure your fee schedule and online banking disclosure clearly state the circumstances when ACH fees are charged.
• Consider disclosing that members may avoid a fee by allowing payees to pull funds (ACH debit) from the member’s account.
• Work with your document provider to update disclosures and fee schedules.

Whether or not your credit union charges a fee for ACH transfers, consider adding binding arbitration language with a class action waiver to your member account agreement. View CUNA Mutual Group's Risk Alert.