US Bank settles overdraft lawsuit for $55M

US Bank, the newest member of Knoxville’s banking community, has agreed to pay $55 million to settle a lawsuit alleging the bank manipulated overdraft fees it charged its customers.

The Minneapolis-based lender entered the Knoxville market about five months ago when it acquired the assets of BankEast after it was shut down by government regulators.

US Bank is one of the largest commercial banks in the country.


Teri Charest, a US Bancorp spokeswoman, said the bank is pleased to resolve the matter and has made changes in recent years in how it handles customer accounts, Reuters reported Monday.

US Bank is the latest bank to settle the overdraft fee lawsuit. Previously, Bank of America, JP Morgan, PNC Financial and others shelled out millions to settle rather than go to trial.

The case has generated a slew of less than flattering headlines. Here’s a sampling:

Motley Fool: Another Bank Settles Up for Bad Behavior

Seeking Alpha: Has Bank of America Finally Hit Bottom?

Bloomberg: PNC Bank Will Pay $90 Million to Resolve Overdraft Lawsuit