Cadence Bank Agrees to $4.5 Million Settlement in Class Action Over Alleged Improper Overdraft Fees

Cadence Bank has agreed to a $4.5 million settlement in response to a class action lawsuit alleging improper overdraft fee charges on certain debit card transactions. The lawsuit claims that customers were unfairly charged overdraft fees even when they had sufficient funds at the time of transaction authorization.

Background of the Lawsuit

The lawsuit, filed under Self v. Cadence Bank, covers the period between January 11, 2019, and November 15, 2023. The plaintiffs alleged that Cadence Bank charged overdraft fees on debit card purchases through a practice known as “Authorize Positive, Settle Negative” (APSN) transactions.

This practice occurs when a customer has enough money in their account when making a purchase, but due to subsequent transactions, the balance turns negative when the purchase is actually settled. As a result, the bank charged overdraft fees unfairly, according to the lawsuit.

Settlement Details

Under the terms of the settlement:

• Monetary Compensation: The $4.5 million settlement will be distributed among affected customers based on the overdraft fees they were charged.
• Debt Forgiveness: In addition to cash payouts, Cadence Bank has agreed to forgive up to $682,000 in unpaid overdraft fees on accounts that were closed during the covered period.

The total settlement value, including debt forgiveness, amounts to $5.182 million. This resolution seeks to compensate affected customers and prevent similar practices in the future.

Who Is Eligible?

Customers who were charged an overdraft fee by Cadence Bank between January 11, 2019, and November 15, 2023, due to APSN transactions are eligible for compensation. Class members do not need to submit a claim—payments will be made automatically to those who were affected.

Individuals who received an official settlement notice via email or mail are included in the class action unless they opt out before the deadline. More information is available on the official settlement website: Self Bank Fees Settlement.

Approval Process and Payout Timeline

The settlement is still pending final court approval. A final approval hearing is scheduled for May 9, 2025. If the court approves the settlement, customers can expect compensation payouts and debt forgiveness to be processed soon after.

Impact on Banking Practices

This settlement highlights the growing scrutiny of bank overdraft fee practices. Overdraft fees have been a controversial issue, with consumer advocacy groups and regulatory agencies questioning their fairness and transparency.

Regulatory agencies, including the Consumer Financial Protection Bureau (CFPB), have been urging banks to reform their overdraft fee policies. More information on consumer financial rights can be found on the CFPB’s official website: www.consumerfinance.gov.

Steps for Affected Customers

If you were charged overdraft fees by Cadence Bank, here’s what you should do:

1. Check your eligibility – Review the details of the lawsuit and see if you were impacted.
2. Monitor settlement updates – Visit the official settlement website and stay informed about court approvals and payment distributions.
3. Review your bank statements – Ensure that you are aware of any fees you were charged.
4. Opt out if necessary – If you wish to exclude yourself from the settlement and retain the right to file a separate lawsuit, check the opt-out deadline on the official website.
5. Report concerns – If you suspect unfair banking practices, you can file a complaint with the CFPB.

Conclusion

The $4.5 million settlement serves as an important step toward ensuring fair banking practices and protecting consumers from excessive fees. As regulatory agencies continue to monitor overdraft charges, customers are encouraged to remain vigilant and informed about their rights.

For further details on this case, visit the official settlement website: Self Bank Fees Settlement.