VANCOUVER, Wash. — iQ Credit Union has agreed to pay $1.075 million to settle a proposed class action lawsuit alleging it improperly assessed certain overdraft and nonsufficient funds (NSF) fees on members’ checking accounts, according to court documents and the settlement administrator.
In the process, iQ Credit Union becomes just the latest CU to reach such a settlement. The CU Daily reported the most recent similar settlement here.
The proposed settlement resolves allegations that the Washington-based credit union charged overdraft fees on debit card transactions that were authorized when sufficient funds were available but later settled after the account balance had fallen below zero, according to ClaimDepot.
No Admission of Liability
The lawsuit also challenged the assessment of multiple NSF fees on the same transaction after items were re-presented for payment. iQ Credit Union denies any wrongdoing, and the settlement is not an admission of liability.
According to ClaimDepot, the settlement establishes a $1.075 million fund to compensate eligible current and former accountholders who incurred the challenged fees during the class period. After deductions for attorneys’ fees, litigation costs, administrative expenses and any service awards approved by the court, the remaining funds will be distributed among eligible class members.
Who’s Eligible
ClaimDepot reported that eligible class members generally include individuals who held an iQ Credit Union checking account during the applicable class period and were charged qualifying overdraft fees on authorize-positive, settle-negative debit card transactions and/or multiple NSF fees on re-presented items, as defined in the settlement agreement. Class members identified through the credit union’s records will not be required to submit a claim form to receive payment.
A final fairness hearing is scheduled for later this year, when a federal judge will determine whether to grant final approval to the settlement. If approved and any appeals are resolved, payments will be distributed to eligible class members, ClaimDepot reported.
Revised Policy
Separately, iQ Credit Union has revised its overdraft policies in recent years. The credit union says it no longer charges NSF fees when transactions are declined because of insufficient funds and explains its current overdraft program on its website. The credit union further stated that the changes, which took effect in 2023, were intended to increase transparency and reduce costs for members.
