Capital One Cannot Avoid Overdraft Issues

Earlier this week, Capital One was told for the third time that national banking regulations don’t protect it from a class action over allegedly illegal overdraft fee practices. A federal judge found that a recent Ninth Circuit preemption decision does not stop the account holders’ state law claims.

As reported by Law 360, the judge said that the Capital One scenario was different than a similar case, referred to as Gutierrez. In that instance, it was decided that the NBA allows banks to dictate the order in which they process transactions. Fees can also be charged as “part and parcel,” in terms of setting prices for consumer checking accounts.

The plaintiffs’ attorney, Bruce S. Rogow, explained to the news source that this is just the latest district court decision to distinguish Gutierrez.

“The fact that all of these cases are alive and well post-Gutierrez is the proper way to view Gutierrez in light of the allegations made in all of these other cases,” he said. “This [case] doesn’t affect banks’ deposit-taking powers in a way that would take it into the preemption areas. There is an area in which the banks cannot hide behind preemption.”

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