SAN FRANCISCO – A federal court here agreed Friday to dismiss a member’s suit claiming that Star One CU violated consumer laws by the way it processes debit transactions, the seventh overdraft suit dismissed out of a total of nine filed against credit union since April.
It was the fifth of six credit union overdraft suit dismissed in California, four of them filed by the same San Jose lawyer, Fernando Chavez, who has one more overdraft suit pending, this one against Alliant CU. In all four cases, Chavez moved for voluntary dismissal, even before the credit union launched a defense.
Three more overdraft cases have been filed against Alabama credit unions and two of them have also been dismissed.
All of the suits allege the credit unions engaged in unfair and deceptive business practices by reordering debit transactions so that the largest transactions are debited first, instead of the most recent.
Similar claims against several large banks have resulted in the banks paying multi-million dollar settlements.
So far, suits against California’s Xceed Financial FCU, Educational Employees FCU, SchoolsFirst FCU, Kern Schools FCU and Star One CU, as well as Alabama’s America’s First FCU and Legacy Community FCU have all been dismissed, and cases are still pending against two others, Alliant CU and Alabama Telco CU.