Billion-Dollar Bank Handing Cash To Current and Former Customers After Lawsuit Accuses Lender of Improperly Assessing Overdraft Fees

A US bank has decided to settle a class-action lawsuit and pay hundreds of thousands of dollars to current and former customers.

The suit alleged that Iowa-based Bankers Trust improperly assessed “Challenged Fees” – which are defined as overdraft fees on transactions where the account had sufficient available balance when authorized.

The bank has agreed to settle for $550,000 and compensate affected customers, as well as forgive and charge-off all uncollected overdraft fees from December 1, 2016, through April 3, 2023.

In its public communications, Bankers Trust denies wrongdoing and says that it “was allowed to assess these fees and properly did so in accordance with the terms of its account agreements and applicable law.”

The allegations center on a set of practices called “Authorize Positive, Settle Negative” (APSN) transactions, where a debit-card purchase is authorized when funds are available, but when the transaction is settled days later and the account balance has changed, the bank imposes an overdraft fee.

From the bank’s FAQ page, the overdraft fee schedule shows that for one-time debit card transactions greater than $30, the standard overdraft fee is $33, and the maximum amount of overdraft and nonsufficient fund fees that may be assessed per day is $132.

Courts will convene for a hearing on December 17, 2025, at 11:00 a.m. (UTC+8) to decide whether to approve the settlement.

According to Bankers Trust’s own 2024 Annual Report, the bank reported total assets of approximately $7.2 billion.