Overdraft Fishing by Lawyers Seen
California Credit Union League President/CEO Diana Dykstra said she’s upset about a string of lawsuits in her state accusing credit unions of unfair and illegal overdraft practices. And she accused attorneys in the state of “fishing for members.”
Dykstra said she’s spoken with each of the six credit union CEOs targeted, and said the suits are frivolous and malicious. “One of the plaintiffs hasn’t even had an overdraft,” Dykstra said. She declined to name the plaintiff.
How can a credit union protect itself from a similar suit? Industry consultant Marvin Umholtz said that, unfortunately, a credit union doesn’t have to be guilty of abusive behaviors to be subjected to lawyers’ attempts to shake down the financial community for settlements.
However, Dykstra said she sent an email to member credit unions shortly after she learned about the Xceed lawsuit, encouraging CEOs to review current overdraft policies and procedures to make sure they are aware of how transactions are being processed.