Overdraft Fee Class Actions Spread to Four More Banks — Are You Owed a Refund?

The short version: A wave of class action lawsuits is targeting banks for charging overdraft fees on debit card transactions using a practice called "authorize positive, settle negative." The way it works: your bank approves a purchase when your account has money. By the time the transaction actually clears a day or two later, your balance has dropped — maybe from other purchases, maybe from scheduled payments — and the bank charges you an overdraft fee even though you had the funds when you bought the thing. Banks including Regions Financial, Truist Bank, TD Bank N.A., and Frost Bank have been sued over this practice in recent years (Bloomberg Law, 2023–2024).

The Trick Banks Used to Charge Fees You Didn't Owe

To understand why these lawsuits are being filed, you need to understand how debit card transactions actually work — because it is not instantaneous, even though it feels like it is.

When you swipe your debit card at a store, the bank first authorizes the transaction. At that point, it checks whether you have enough money. If you do, it approves the purchase and puts a temporary hold on that amount. So far so good.

But the transaction doesn't actually settle (meaning the money actually moves) until one to three business days later. In the meantime, other transactions can hit your account: a rent auto-payment, a utility bill, another debit purchase. By the time the original transaction settles, your balance may have dropped below zero — and the bank charges you an overdraft fee.

Here is the problem the lawsuits target: at the time the bank authorized your purchase, you had the money. The bank said yes. Then the bank waited, let other things drain your account, and charged you a fee on the transaction it had already agreed to approve. That, consumer advocates argue, is not what customers agreed to, and it is not what the bank's own account agreements say (Consumer Financial Protection Bureau, Supervisory Highlights, 2022).

This practice has a name in the banking world: Authorize Positive, Settle Negative, or APSN. Multiple federal and state regulators, including the CFPB, have described it as deceptive (CFPB, Supervisory Highlights, Issue 27, 2022).

Which Banks Are Being Sued

The APSN overdraft fee litigation has expanded significantly since 2020. Among the banks that have faced class actions in recent years:

• Regions Financial Corporation — faced multiple class actions in Alabama federal courts over APSN practices. Regions reached a settlement in 2022 to resolve claims related to these fees (court records, N.D. Ala., 2022).
• Truist Bank (formed by the merger of BB&T and SunTrust) — sued in 2022–2023 over overdraft fee practices, including APSN and extended overdraft fees (Bloomberg Law, 2023).
• TD Bank N.A. — reached a $97 million class action settlement in 2014 over overdraft ordering practices; new suits targeting TD Bank's APSN-related fees have been filed in 2023–2024 (court records, D.N.J., 2014; Bloomberg Law, 2023).
• Frost Bank — named in Culberson v. Frost Bank, a class action filed in the Western District of Texas alleging illegal overdraft fee practices including APSN (W.D. Tex., 2023).

Wells Fargo, while not in the most recent wave, paid a landmark $3.7 billion in a CFPB consent order in December 2022, including $1.3 billion in consumer redress for illegal fee and account practices (CFPB Enforcement Action, Wells Fargo, December 2022). That settlement set a clear precedent that federal regulators view these practices as legally actionable.

What the CFPB Has Said

The Consumer Financial Protection Bureau has repeatedly flagged overdraft fee practices as a priority enforcement area. In 2022, the CFPB identified APSN overdraft fees as a likely unfair, deceptive, or abusive act under federal law in its Supervisory Highlights report (CFPB, Supervisory Highlights Issue 27, 2022). In January 2024, the CFPB proposed a rule that would cap overdraft fees for large banks at no more than $8 per incident — down from fees that have typically ranged from $25 to $37 at major institutions (CFPB, Proposed Rule on Overdraft Fees, January 2024).

The rule-making process is ongoing. But the pattern is clear: federal regulators consider many overdraft fee practices to be exploitative, and private class action lawsuits have been the primary avenue for consumers to recoup money lost to these fees.

Who May Be Affected

You may have been affected by APSN overdraft fees if:

• You bank (or banked) with Regions, Truist, TD Bank, Frost Bank, or another institution that has been sued over overdraft practices
• You were charged an overdraft fee on a debit card purchase even though your account showed a positive balance around the time of that purchase
• You were charged overdraft fees that seemed to multiply quickly — for example, a fee triggered by one transaction that then caused other transactions to overdraft in a chain
• You noticed your bank processed larger debits before smaller ones, draining your balance faster and maximizing fees (a separate but related practice called "high-to-low reordering")

You do not need to have kept every bank statement. A general recollection of which bank you used and the approximate years you were charged overdraft fees is enough to start a review.

What to Do Right Now

Pull Your Bank Statements

Log in to your online banking and download or print statements from the past three to five years. Look for any overdraft fees, NSF (non-sufficient funds) fees, or extended overdraft fees. Note the date, the amount of the fee, and the transaction that triggered it. Most banks keep at least seven years of statements in online accounts.

Check the Trigger Transaction

For each overdraft fee you find, look at what transaction caused it. If you had a positive balance when that purchase was authorized — which you may be able to see in your transaction history as a "pending" item — and the fee hit only after the transaction settled days later, that is a potential APSN situation.

Submit Your Information for Review

The form above takes about two minutes. A real person will review your information and reach out within a week if your situation may qualify you to join a class action or file an individual claim. There are no fees unless we recover money for you, and no obligation to proceed after submitting.