First Basin Credit Union has agreed to pay an Arizona man cash to settle civil charges stemming from the absence of a fee disclosure outside its ATM, the 12th credit union or bank agreeing to settle with the so-called ATM vigilante.
Lawyers for the Odessa, Texas-based credit union said they are barred under the confidential terms of the agreement from disclosing how much they are paying Nicholas Pavle to settle charges of violation of the Electronic Funds Transfer Act. But a separate settlement Pavle entered into with Arizona Central Credit Union paid the suit-happy Arizonan $1,000 and lawyers’ fees.
Pavel, who has also settled suits with Complex Community Credit Union and nine banks, is one of a number of people who have been filing series of suits under the EFT Act. An elderly Michigan women has collected tens of thousands of dollars in more than three dozen suits filed under the ATM law; and a New Yorker has filed another dozen, mostly regarding ATMs in Texas (see story).
Randall Rouse, a Midland, Texas-based attorney representing First Basin Credit Union, says the credit union was successful, however, in limiting its liability by getting the judge in the case to deny it class-action status, which would have made its financial exposure significantly greater. The settlement was not enough for the $170 million credit union to file for an insurance claim.
In the Arizona Central Credit Union case, the Phoenix-based financial institution agreed to create a $46,425 settlement fund to settle claims that two of its ATMs in Tucson did not have the proper disclosure for nonmember fees charged posted on the outside of the machine, as required under the EFT Act. Claimants who could prove they used one of the ATMs between April 23, 2009, and April 23, 2010, are entitled to $100 for each transaction.
Pavle was paid $1,000 for his services as class representative and his lawyers’ fees, not to exceed $10,685.
Numerous other credit unions have opted to settle, rather than fight similar suits, including Michigan’s ELGA Credit Union; Houston’s JSC Federal Credit Union; Jamestown Area Community Federal Credit Union in New York; Credit Union One of Illinois; Tennessee’s Resource Federal Credit Union and LA Financial Federal Credit Union.
Credit Union National Association is calling on the Consumer Financial Protection Bureau to use its new authority over the EFT Act to amend requirements that force two separate disclosures on fees to a single, on-screen disclosure (see story). Moreover, a coalition of credit-union and banking lobbyists joined the ATM industry in calling for legislation eliminating the need for a physical fee disclosure outside ATMs to stop the proliferation of lawsuits alleging violation of the EFT Act (see story).
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