Raleigh, NC: A $41.9 million settlement has received preliminary approval potentially ending a consumer banking class action lawsuit brought military families who alleged that Bank of America (BoFA) overcharged them on interests and fees related largely to mortgage and credit card accounts and then tried to conceal those violations.
If final approval is granted, restitution will be made to more than 125,000 military members who alleged BoFA’s actions are in violation of the Servicemembers Civil Relief Act.
Under the terms of the settlement BoFA would, for a five year period, refrain from using a method for calculating interest subsidy that the service members contend could lead to higher costs for class members.
According to the deal, Class members will be divided into four groups, depending on the types of accounts they held. They will receive payments accordingly, with the first $15.4 million going to class members who did not previously receive or deposit payouts from Bank of America.
“After the class wide distribution, the value of any uncashed distribution checks will be redistributed further to the class, if the value is sufficient to make it economically feasible, or else such residual funds will be distributed as cy pres to a non-profit organization providing services to military servicemembers and veterans,” court documents state.
The case is Childress et al. v. Bank of America Corporation et al., case number 5:15-cv-00231, in the U.S. District Court for the Eastern District of North Carolina.