Midland States Bank to Pay $3.125 Million in Overdraft Fee Lawsuit Settlement

Midland States Bank, an Illinois-based financial institution, is preparing to pay $3.125 million to settle a class-action lawsuit. The lawsuit alleges that the bank, along with two other banks it acquired—Centrue Bank and Alpine Bank & Trust—improperly charged overdraft and non-sufficient funds (NSF) fees. The plaintiffs accused the bank of breaching contract terms, engaging in unjust enrichment, and violating the Illinois Consumer Fraud and Deceptive Business Practices Act.

The settlement covers customers who had a checking account with Midland States Bank or the acquired lenders between April 8, 2012, and April 30, 2022. Eligible plaintiffs could receive up to $10,000 each, according to the settlement agreement. It is important to note that the settlement does not constitute an admission of guilt by Midland States Bank.

Class members who wish to object to the settlement must submit their objections in writing to the court by August 11. Those who want to opt out of the settlement must also notify the settlement administrator by the same date. A final approval hearing is scheduled for September 10.

This settlement highlights the ongoing scrutiny and legal challenges faced by financial institutions regarding their fee structures and contractual obligations. The case underscores the importance of transparency and fairness in banking practices, as well as the potential financial and reputational risks associated with non-compliance. The bank's decision to settle the lawsuit for $3.125 million indicates a willingness to resolve the dispute without admitting fault, while also providing compensation to affected customers. The settlement process, including the deadlines for objections and opt-outs, ensures that class members have a voice in the resolution and can seek further legal recourse if necessary. The final approval hearing on September 10 will determine the court's stance on the settlement, potentially setting a precedent for similar cases in the future.