PNC to Settle ATM Overdraft Case for $90 Million

Date : 06/26/2012 @ 5:58PM
Source : Dow Jones News
Stock : Bank of America Corp. (BAC)
Quote : 23.525  0.165 (0.71%) @ 10:09AM

PNC to Settle ATM Overdraft Case for $90 Million

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--Court documents: PNC agrees to settle overdraft case for $90 million

--Bank is latest to settle litigation over controversial practice

--No liability admitted

 
   By Christian Berthelsen 
 

Pittsburgh-based PNC Bank has reached an agreement to settle a class-action lawsuit for $90 million alleging it overcharged customers on overdraft fees by re-sequencing debit transactions, court records show.

PNC won't admit liability as part of the settlement with plaintiffs in the lawsuit, according to court documents in the Miami federal-court case that were filed Tuesday. A finalized settlement agreement is to be filed with the court in the next 45 days.

The agreement follows settlements of similar cases by major banks, including Bank of America (BAC) and J.P. Morgan Chase & Co. (JPM). The tactic, common among banks during the latter half of the 2000s, rearranged the order of transactions in customer accounts by placing the largest transactions first rather than chronologically, creating over-drawn conditions for later transactions and generating multiple overdraft fees.

The practice outraged bank customers and consumer advocates, who railed against what they termed $38 cups of coffee. Many banks have eliminated the practice.

Fred Solomon, a spokesman for PNC, didn't immediately return a telephone call seeking comment.

PNC Bank is a unit of PNC Financial Services Group Inc. (PNC).

--Andrew R. Johnson contributed to this article.

Write to Christian Berthelsen at christian.berthelsen@dowjones.com.

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