CIBC has agreed to a $10 million proposed settlement in a class action lawsuit over non-sufficient-funds (NSF) fees. The settlement comes as new bank rules cap NSF fees at $10 when a transaction exceeds a customer's account balance.
Details of the Settlement
The proposed settlement must still be approved by the court. It covers current and former CIBC customers who were charged NSF fees. According to the statement of claim, the bank allegedly charged excessive fees that were not properly disclosed.
CIBC did not admit any wrongdoing as part of the settlement. The bank said in a statement that it agreed to resolve the matter to avoid the cost and distraction of litigation.
New NSF Fee Rules
The settlement follows new regulations from the federal government that cap NSF fees at $10. The rules apply to all banks and came into effect earlier this year. Consumer advocates have long argued that NSF fees were disproportionately high and penalized low-income customers.
Under the settlement, eligible customers may receive compensation for fees charged above the new cap. The exact amount per claimant will depend on the number of claims filed.
Impact on Customers
CIBC customers who were charged NSF fees may be eligible for a portion of the settlement fund. The bank will notify eligible customers by mail or email. Customers can also visit the settlement website to file a claim.
According to the proposed settlement, the bank will also implement changes to its NSF fee practices to comply with the new rules. This includes clearer disclosure of fees and limits on the number of times fees can be charged per day.
