BofA to pay $410 mn in overdraft fee case

NEW YORK: Bank of America has agreed to pay $410 million to settle a federal lawsuit alleging the bank charged excessive overdraft fees.

The suit is one of several filed against several banks from plaintiffs in 14 states, which were consolidated in a federal court in Florida. Other banks named in related suits include Wells Fargo and Citibank.

America's largest bank said in a court filing Friday that it has reached a memorandum of understanding to settle the claims in the suit by paying $410 million. The settlement is subject to court approval. Consumers alleged the bank processed the payments in a way that caused more overdrafts.

Customers pay overdraft fees when they spend more money than remains in their accounts. The fees can reach $35 apiece. Before federal law changed this summer, banks frequently charged overdraft fees on numerous transactions in a single day.

Anne Pace, a spokeswoman for the Charlotte, North Carolina, bank, said Saturday that BofA is ``pleased to reach a fair resolution'' to the case. BofA has already has addressed many related customer concerns, she said.

Wells Fargo is appealing a $203 million judgment in a separate California case.