Settlement Stock Art. Photo by John Disney/ALM
An Indiana court will decide in March whether to grant final approval of a $635,000 agreement to settle a class action lawsuit that alleged the $1 billion Heritage Federal Credit Union in Newburgh, Ind., wrongfully issued certain overdraft fees on member debit card accounts.
While Heritage disputed the allegations in this lawsuit and denied any liability or wrongdoing, it agreed to the settlement to avoid expense, inconvenience or distractions of future litigation.
The class action lawsuit included all Heritage members who were assessed an overdraft fee after a debit card transaction that did not overdraw the member’s account between Dec. 20, 2021 and April 8, 2025. In addition, the lawsuit covered all Heritage members who were assessed a fee on a debit card transaction that was authorized on sufficient account funds but settled on negative funds between Dec. 20, 2012 and April 8, 2025, according to the settlement agreement that received the court’s preliminary approval.
The lawsuit did not estimate the number of members affected. The credit union serves nearly 65,000 members.
Kevin Lowe, who filed the lawsuit in Circuit Court in Warrick County, Ind., is expected to be paid a $10,000 service fee for his role in this case.
His attorney, Lynn A. Toops of Indianapolis, is expected to be paid more than $211,000, or one third of the settlement’s amount. The settlement administrator has agreed to cap expenses to $44,750, according to court documents.
The remaining $369,250 will be divided among the class members in accordance with the formula outlined in the settlement agreement.
Members will receive credit to their accounts, while former members will receive a check that will be mailed to their most recent address on file.
Contact Peter Strozniak at peter.strozniak@arc-network.com.
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