S.D. banks at center of national lawsuits over deposit fees

Consumer watchdog warned that fees were 'unfair'

Photo by Jason Dent on Unsplash

South Dakota’s banking industry is at the center of a national legal challenge that could punish banks that charged certain fees to customers.

Both Citibank and Wells Fargo, banks based in the state, are the subject of two federal lawsuits seeking class-action status. The suits have been filed by residents outside of the state, and they allege the banks have violated federal and state laws by charging consumers “deposited item return unpaid fees.”

Those fees are charged to customers who deposit a check into their accounts, but the checks are returned unprocessed – most commonly because the accounts from which they were written didn’t have sufficient funds to cover them.

Besides Citibank and Wells Fargo, similar suits have been brought against JPMorgan Chase and PNC Bank, said Lisa Considine, a New York lawyer who is representing the plaintiffs. JPMorgan Chase is based in New York and PNC Financial Services Group is based in Pennsylvania.