Star One Overdraft Lawsuit Dismissed
The $6 billion Star One Credit Union can check defending a frivolous lawsuit off its to-do list after a cookie-cutter overdraft suit against it was dismissed Thursday in U.S. District Court.
The Notice of Voluntary Dismissal was filed by San Jose, Calif.-based attorney Fernando F. Chavez, who has initiated five such lawsuits against credit unions, including the Sunnyvale, Calif.-based Star One.
The court documents state that the defendants, which include Star One volunteers, were never served with the complaint, prompting the dismissal.
Star One President/CEO Rick Heldebrant confirmed the dismissal, saying his board members were never served papers.
“We’ve seen more in the paper than we’ve heard from them,” Heldebrant said of the plaintiffs.
Chavez accused Star One and other credit unions of “the systematic manipulation and re-ordering of electronic debit transactions from the highest dollar amount to the lowest dollar amount…to maximize the amount of overdraft fees collected.”
Heldebrant Monday repeated what he told Credit Union Times in July shortly after the suit was first filed: Star One does not reorder transactions.
Star One is the fourth Chavez case to be dismissed; only his overdraft suit against the $8.5 billion Alliant Credit Union remains. Should that suit proceed, an Initial Case Management Conference is scheduled for Oct. 9. Lawsuits filed by Chavez against the $9.6 billion SchoolsFirst FCU of Santa Ana, Calif., the $1.3 billion Kern Schools Federal Credit Union of Bakersfield, Calif. and the $2 billion Educational Employees Credit Union of Fresno, Calif. have been dismissed.
An overdraft suit against the $590 million Alabama Telco Credit Union of Hoover, Ala. is still active. That suit alleges the credit union violated Regulation E by enrolling plaintiffs into an overdraft program without proper opt-in authorization.