POSTED: 12:11 p.m. HST, Jul 18, 2011
LAST UPDATED: 4:08 p.m. HST, Jul 18, 2011
Bank of Hawaii, the state's second-largest bank, said it reached a tentative settlement on Friday in a class action lawsuit, claiming the bank improperly charged overdraft fees on debit card transactions.
"The tentative settlement, subject to documentation and court approvals, provides for a payment by the company of $9 million into a class settlement fund the proceeds of which will be used to refund class members, and to pay attorneys' fees, administrative and other costs, in exchange for a complete release of all claims asserted against the company," the bank said in a filing with the Securities Exchange Commission.
The complaint, filed in February on behalf of Honolulu residents Lodley and Tehani Taulava, accused Bank of Hawaii of engaging in a systematic policy of re-ordering debit card transactions from highest dollar amount to lowest dollar amount. The suit said this practice allowed the bank to deplete the customer's available funds as quickly as possible while maximizing the number of overdraft fees.
Bank of Hawaii spokesman Stafford Kiguchi said at the time that the bank changed its policy in January and now generally posts transactions from lowest dollar amount to highest.
American Savings Bank and Central Pacific Bank, the third- and fourth-largest banks in the state in terms of assets, were sued in March also for allegedly maximizing profits by manipulating debit card customers' overdraft fees. Those suits have not yet been settled.
All three suits, filed as a class action by Honolulu-based Perkin & Faria LLLC, sought repayment of all overdraft fees paid to members of the class, plus interest; punitive and triple damages; and attorney fees.
Perkin & Faria had assistance from three mainland firms on the Bank of Hawaii suit, while its co-counsel on the American Savings and Central Pacific suits is the Honolulu firm of Bickerton Lee Dang & Sullivan.