Last week, Toronto Dominion Bank became the latest financial institution to settle with customers who accused it of charging them excessive overdraft fees.
On May 8, the Canadian bank’s TD Bank unit agreed to pay $62 million to settle U.S. lawsuits in which customers accused it of routinely processing transactions from largest to smallest instead of chronologically, which caused overdraft fees of between $25 and $35 per transaction to quickly accumulate because their balances would deplete faster.
According to Reuters, TD Bank didn’t admit liability.
The bank’s agreement is the latest in a group of lawsuits that customers filed against more than 30 lenders. The suits spurred a new regulation in 2010 in which the Federal Reserve prohibits banks from charging overdraft fees on electronic or debit card transactions without advance customer approval.
Other banks that have settled in the overdraft fee litigation include Bank of America, which settled for $410 million, the largest amount to date; Royal Bank of Scotland Group Inc.’s Citizens Financial unit, which settled for $137.5 million; and JPMorgan, which settled for $110 million. Other large banks that have yet to settle include Citigroup Inc. and Wells Fargo & Co.
Miami U.S. District Judge James Lawrence King, who is overseeing the cases, still must approve TD Bank’s settlement.