Whitney Bank settles overdraft class action for $6.8 million

TAMPA – New Orleans-based Whitney Bank has settled a class action lawsuit brought by account holders who claimed the bank organized payments and withdrawals to maximize overdraft fees.

The case was settled for $6.8 million.

The suit, filed last August by California resident Angelique LaCour on behalf of all Whitney customers who received overdraft fees, was settled on Feb. 23.

LaCour argued that Whitney's overdraft fees targeted mostly poor customers from approximately 150 locations throughout Alabama, Florida, Louisiana, Mississippi and Texas. The plaintiffs alleged that Whitney engaged in an automatic overdraft fee system in order to maximize their profits by increasing the likelihood its customers would go over their balance and be charged a $32 overdraft fee, even on purchases of only a few dollars.

The plaintiffs in the suit claimed Whitney reordered and manipulated transactions to ensure the highest number of overdrafts. Whitney was also accused of not allowing customers to opt out of the system, not warning them when a transaction would result in an overdraft, not providing customers with accurate balance information, charging exorbitant overdraft fees and violating consumer protection acts.

Whitney is just the latest bank to settle such a class action. Last year Bank of America settled a similar suit for $410 million.

The docket number for the case was 11-cv-1896 and was handled by U.S. Federal Judge Virginia M. Covington Hernandez of the United States District Court Middle District of Florida.