Banco Popular Lawsuit – In a significant development, Popular Community Bank, formerly known as Banco Popular, has agreed to a $1.5 million settlement to resolve claims of unfair overdraft fees. This settlement marks the culmination of a class action lawsuit initiated by Frankie Lipsett, who accused the bank of breaching its contractual promises and misrepresenting the way it assessed overdraft fees.
Contents
Background of the Banco Popular Lawsuit
Who:
- Plaintiff: Frankie Lipsett
- Defendant: Banco Popular (now Popular Community Bank)
Why:
- Claims: The plaintiff alleged that Banco Popular charged unfair overdraft fees on transactions where the account balance was positive at the time of authorization.
Where:
- Court: New York Federal Court
The lawsuit was originally filed in May 2022, challenging the bank’s practice of charging overdraft fees even when transactions were initially authorized against sufficient available funds.
Details of the Settlement
Popular Community Bank has agreed to pay $1.5 million to settle these claims. Additionally, the bank has committed to changing its fee policies, agreeing not to charge overdraft fees on transactions that were authorized when sufficient funds were available, for a period of five years. This policy change is expected to result in approximately $3 million in savings for bank customers.
Breakdown of the Settlement
| Details | Amount |
|---|---|
| Settlement Fund | $1.5 million |
| Percentage of Contested Fees Covered | 46% |
| Original Contested Fees Identified | $3.25 million |
| Additional Savings from Policy Changes | $3 million (estimated) |
The settlement fund amount was proposed by a mediator and represents 46% of the total contested fees identified during the lawsuit’s discovery phase.
Who’s Eligible
Current and former Banco Popular de Puerto Rico customers assessed retry/resubmitted overdraft and NSF fees between Feb. 1, 2016, and April 1, 2022.
Implications for Bank Customers
The agreement not only provides direct financial relief but also ensures that Popular Community Bank will not impose the disputed fees for the next five years. This aspect of the settlement is particularly significant as it offers substantial ongoing savings for bank customers, reinforcing the importance of transparent and fair banking practices.
Legal Representation
The plaintiff, Frankie Lipsett, was represented by Michael R. Reese of Reese LLP and Jeffrey Kaliel of Kaliel Gold PLLC. The case, officially titled In re: Axelrod, et al. v. Lenovo (United States) Inc., was filed under Case No. 4:21-cv-06770 in the U.S. District Court for the Southern District of New York.
Comparisons with Other Cases
This settlement is part of a broader trend of banks being held accountable for unfair fee practices. For instance, in a similar case last year, Bank of America agreed to pay $8 million to settle claims related to unfair overdraft and non-sufficient fund fees on checks. Such settlements highlight the growing scrutiny of banking practices and the push for greater consumer protection in the financial sector.
Next Steps for Affected Consumers
Consumers who believe they were unfairly charged overdraft fees by Banco Popular can stay informed about the claims process through updates provided by Top Class Actions. The settlement administrator’s website will offer instructions for filing claims once it goes live.
Conclusion
The $1.5 million settlement between Popular Community Bank and Frankie Lipsett represents a meaningful resolution to the issue of unfair overdraft fees. It underscores the importance of fair banking practices and offers substantial financial relief and policy changes to protect consumers in the future.
| Official Website | PRBankFeeClassAction.com |