Court OKs $2.9M Umpqua Bank Settlement

     SAN FRANCISCO (CN) – A federal judge approved a $2.9 million settlement between Umpqua Bank and customers who claim they were squeezed for overdraft fees.
     U.S. District Judge Jon Tigar vacated a trial scheduled for April 2015 after plaintiffs Amber Hawthorne, Christopher Kneer and Victoria Kneer announced a settlement agreement with Umpqua.
     The plaintiffs filed a class action against the bank in December 2011, and a third amended complaint in California’s Northern District in January 2014. They claimed Umpqua uses special software to maximize the amount of overdraft fees it charges customers.
     They also called Umpqua’s account agreement misleading and said the bank “provides inaccurate balance information to its customers through its electronic network,” informing them “that they have a positive balance when, in reality, they have a negative balance, despite the bank’s actual knowledge of outstanding debits and transactions.”
     The parties signed the settlement agreement in June 2014 after three additional months of negotiations, and filed a motion for preliminary approval on June 19.
     Tigar granted preliminary approval on Monday.
     “The settlement was reached at arms-length with the use of a professional mediator and over the course of months of effort by both parties,” Tigar said in his order. “The settlement amount is adequate when compared to the total potential damages in the case. Plaintiffs estimate that class members will receive 37.6 percent of the total damages they would receive at trial should they prevail. The court finds that a net recovery of 37.6 percent is fair, adequate and reasonable in light of the strength of plaintiffs’ case, and the risk, expense, complexity and likely duration of this litigation.”

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