A recent order by a Washington, D.C. district judge is providing new insights about exactly which parts of the wording in credit union overdraft agreements may be fueling a string of class-action lawsuits across the country.

The thoughts contained in U.S. District Judge John Bates's Oct. 21 order are significant because the lawsuit, which was filed against NASA Federal Credit Union almost a year ago, is one of more than a dozen nationwide making similar claims: that credit unions are incorrectly using available balance rather than actual balance to assess overdraft fees. Upper Marlboro, Md.-based NASA FCU has $2 billion in assets and 136,000 members. 

According to the order, which threw out all but one of the plaintiff's claims, much of the trouble flowed from a single sentence in NASA FCU's opt-in agreement. That sentence stated that an "overdraft occurs when you do not have enough money in your account to cover transactions, but we pay it anyway." The wording led to months of wrangling over the meanings of "enough" and "account," as well as the plaintiff arguing that because the word "available" does not appear in the sentence, the actual balance applied.