Overdraft - White Word on Red Puzzles on White Background. 3D Render. Credit unions have gained popularity throughout the country for having a more individualized customer-focused reputation than big banks.

Unfortunately, a recent consumer study shows that credit unions may be no better about charging overdraft fees, which are nearly as expensive as those charged at banks.

According to a 2015 study by Moebs Services, the median price on a bank checking account is $30, while it’s $29 at credit unions. Moebs notes that the last time the gap between these financial institutions was so narrow was in 2007, when most credit unions charged $25.

The 2015 Moebs study reviewed approximately 2,800 banks, thrifts, and credit unions, and found the difference between banks and credit union overdraft charges to be statistically insignificant. While credit unions did start with lower overdraft charges, they steadily increased fees when fewer account holders would overdraw their account.

Take for instance, two popular credit unions — Star One Credit Union and First Technology Federal Credit Union. Both of these credit unions offer their own unique overdraft protection programs, along with a set of penalties if the customer faces the problem of insufficient accounts.

Star One Credit Union recommends that customers sign up for their savings account overdraft protection, which is setup to have the customer’s primary checking and savings account linked.

Under this program, if a customer is found to have insufficient funds in their checking account, multiples of $100 will be transferred from the savings account for free, according to the credit union’s website.

Star One can provide automatic courtesy pay coverage as a last resort of overdraft protection, which requires customers to sign up for overdraft protection. Under this provision, Star One will automatically provide up to $2,000 for an insufficient fund purchase. However, there is a $15 fee charged per overdraft transaction.

First Technology Federal Credit Union explains that the options of their overdraft protection is determined based on the customer’s account type.

Calling overdraft fees “Convenience Transfers”, First Technology begins by explaining why the overdraft protection system is in place and how it prevents consumers from spending too much money.

First Technology is comparably stricter than Star One, as it only allows six convenience transactions per month for the instant access account. Depending if the consumer has a savings deposit and instant access account, First Technology describes what is considered a convenience transaction as according to their policy.

These convenience transactions are essentially any occurrence of an overdraft transfer to another account to cover for an insufficient fund purchase. First Technology emphasizes the importance of avoiding the problem of insufficient funds and to not hit the monthly transaction limits.

Unfair Credit Union Overdraft Fee Practices

As of Aug. 15, 2010, financial institutions became prohibited from charging overdraft fees unless the customer signs up for overdraft protection. Still, many consumers are reporting unfair overdraft fee practices such as the processing of their transactions out of order so their credit union can allegedly maximize the amount of overdraft fees charged.

The Consumer Financial Protection Bureau is currently reviewing overdraft protection practices, which may result in stricter regulations. In addition, a credit union class action investigation has recently been launched in response to consumer reports that many of these financial institutions have unfairly raised overdraft fees.

Do YOU have a legal claim? Fill out the form on this page now for a free, immediate, and confidential case evaluation. Some of the credit unions being investigated include, but are not limited to:

State Employees Credit Union

Pentagon Federal Credit Union

Boeing Employees Credit Union

Alliant Credit Union

Star One Credit Union

First Technology Federal Credit Union

America First Federal Credit Union

Randolph Brooks Federal Credit Union,

Suncoast Credit Union

Randolph Brooks Federal Credit Union

American Airlines Federal Credit Union

Mountain America Federal Credit Union

Vystar Credit Union

Space Coast Credit Union

Patelco Credit Union

The attorneys who work with Top Class Actions will contact you if you qualify to let you know if an individual lawsuit or class action lawsuit is best for you. Hurry — statutes of limitations may apply.

Learn More

Get Help – It’s Free

Join a Free Credit Union Overdraft Fee Class Action Lawsuit Investigation

If your credit union charged you overdraft fees, you may have a legal claim. Fill out the form on this page now to find out if you qualify!

An attorney will contact you if you qualify to discuss the details of your potential case.

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