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Current and former account holders whom iQ Credit Union charged certain overdraft fees or NSF fees between Dec. 12, 2018 and July 31, 2023, may be eligible to receive a cash payment or account credit from a class action settlement.
iQ Credit Union agreed to pay more than $1 million in cash and waived fees to settle a class action lawsuit alleging the credit union improperly charged overdraft fees on signature-based debit card transactions and nonsufficient funds fees on multiple presentments of the same item.
Who are the class members?
Class members must meet the following criteria:
- They are a current or former account holder whom iQ Credit Union charged at least one of the following fees between Dec. 12, 2018 and July 31, 2023:
- An overdraft fee on a signature-based debit card transaction that was authorized when their account had sufficient funds and settled in the authorized amount (referred to as APSN fees)
- A nonsufficient funds fee on the second or third presentment of an item that a merchant previously returned for insufficient funds (referred to as retry fees)
- They received a postcard or email notice of the settlement.
How much are settlement payments?
- Pro rata cash payment: Eligible class members will receive a pro rata cash payment from the net settlement fund. The settlement administrator will determine the payment amount by the amount of qualifying fees paid.
- Debt forgiveness: Former account holders whom iQ assessed qualifying fees but who did not pay them when the credit union closed their account will no longer owe the fees. iQ will forgive a total of $58,947 qualifying fees.
- Cease future fees: iQ Credit Union agreed to stop assessing qualifying ASPN and retry fees for no less than three years from the settlement final approval date. This benefit has an estimated value of $195,000
No claim form required
Class members do not need to submit a claim form to receive a settlement payment.
Payout options
- Current account holders will receive a credit to their iQ Credit Union account
- Former account holders will receive a check mailed to their last known address.
Settlement fund breakdown
The settlement fund will include:
- Settlement administration costs: To be determined
- Attorneys’ fees: Up to $334,649 plus reimbursement of expenses
- Service award to class representative: Up to $5,000
- Payments to eligible class members: Remainder of $750,000 cash settlement fund
- Debt forgiveness: $58,947
- Fee practice changes for at least three years: Valued at $195,000
Important dates
- Exclusion deadline: Aug. 19, 2026
- Final approval hearing: Sept. 25, 2026
When is the iQ Credit Union overdraft fee settlement payout date?
The settlement administrator will issue payments, account credits and debt forgiveness to eligible class members within 65 days of the final approval date.
Why is there a class action settlement?
The class action lawsuit claimed iQ Credit Union improperly charged overdraft fees on certain debit card transactions and nonsufficient funds fees on multiple presentments of the same item. The plaintiff alleged these practices violated account agreements and state law.
iQ Credit Union denies the allegations but agreed to settle to avoid the cost and uncertainty of continued litigation and a possible trial.
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