SAN FRANCISCO – A federal court here on Wednesday agreed to dismiss a member’s suit claiming Alliant CU violates consumer laws by the way it processes debit transactions, the eighth overdraft suit dismissed out of a total of nine filed against credit unions since April.

That means that all six overdraft suits naming California credit unions have been dismissed, five of them filed by the same San Jose lawyer, Fernando Chavez. In all five cases, Chavez moved for voluntary dismissal, even before the credit union launched a defense. Three overdraft cases have been filed against Alabama credit unions, with two of those having been dismissed. The only one of the nine suits still pending is against Alabama Telco CU.

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, thereby creating additional overdrafts.

Similar claims against several large banks have resulted in the banks paying multi-million dollar settlements.

So far, suits against Chicago’s Alliant CU and its California operations, 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.


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