Park National Bank Settles Overdraft Fee Lawsuit for $510,000

A multi-billion-dollar bank has agreed to pay out $510,000 to resolve a class action lawsuit that alleged the financial institution improperly charged overdraft fees to its customers. The lawsuit, which was filed against Park National Bank, accused the Ohio-based institution of assessing allegedly improper Authorized Positive Purportedly Settled Negative (APPSN) fees between November 1st, 2016, and February 20th, 2025. These fees are typically charged to accounts that are initially authorized for a transaction but later have insufficient funds to process it, resulting in an overdraft.

Park National Bank, which has more than $9.8 billion in consolidated assets, has denied any wrongdoing or liability but chose to settle the case to avoid the costs associated with prolonged litigation. The bank has agreed to establish a settlement fund of $510,000 and will also provide overdraft forgiveness as outlined in the settlement agreement. Up to $170,000 of the settlement fund could be allocated to attorneys’ fees, with the court determining the final amount based on various factors, including the risk, time, and outcome of the case.

The court is scheduled to hold a final approval hearing for the settlement on September 5th. If approved, payments to the affected customers are expected to be made within two months of the effective date. This settlement underscores the ongoing scrutiny and legal challenges faced by financial institutions regarding their fee structures and customer practices. Overdraft fees, in particular, have been a contentious issue, with critics arguing that they can be excessive and disproportionately affect lower-income individuals who rely on overdraft protection for unexpected expenses.

The settlement highlights the importance of transparency and fairness in banking practices. Financial institutions are under increasing pressure to ensure that their fee structures are clear and that customers are not unfairly burdened by unexpected charges. The $510,000 settlement represents a significant step towards addressing these concerns and providing compensation to affected customers. It also reflects a broader trend in the financial industry, where institutions are opting to resolve legal disputes through settlements rather than protracted litigation. This approach not only saves time and resources but also allows banks to focus on improving their customer service and compliance practices.

The decision to settle the lawsuit serves as a reminder to financial institutions about the need for robust compliance programs and customer protection measures. Banks must ensure that their practices align with regulatory requirements and industry standards to avoid legal challenges and maintain customer trust. The $510,000 settlement is a clear indication that financial institutions must prioritize transparency and fairness in their operations to avoid costly legal battles and reputational damage. As the financial industry continues to evolve, banks must prioritize transparency and fairness to maintain customer trust and avoid legal challenges.