All About US Bank Lawsuits

U.S. Bank has millions of customers in the US. Like most big banks, the company has faced several recently filed legal actions.

As a customer, some of them might be relevant to your own issues.

If you’re considering legal action against with U.S. Bank, here are some things you should know:

ARE LAWSUITS ALLOWED AGAINST U.S. BANK?

Thanks to an arbitration clause, it’s likely your U.S Bank contract says you can’t sue U.S Bank in any court except small claims court, .

Because suing through small claims court can be time consuming and complicated, we suggest consumer arbitration as a better solution.

WHAT IS A CLASS ACTION LAWSUIT? CAN I FILE A CLASS ACTION LAWSUIT AGAINST U.S. BANK?

Class action lawsuits are designed to bring together a group of individuals with the same complaint.

However, if you see an arbitration clause in your contract, you may not be able to file an original claim or join an existing class action lawsuit.

Sometimes, you’ll see lawsuits against banks that are brought by government agencies or other financial institutions, which unfortunately offer more legal options than what the average consumer has to consider.

AS A U.S. BANK CUSTOMER, WHAT ARE MY OPTIONS FOR A LAWSUIT?

One option you have is to sue U.S Bank in small claims court. If your claim qualifies for small claims court, you will be asked to attend a court hearing and pay legal fees to present your case.

You can also do everything from your home. Consumer arbitration is the process written into the US Bank terms of service contract. It lets you argue your case before an independent arbitrator who can force US Bank to fix the problem and compensate you. FairShake helps make this process easy and convenient.

TOP 4 U.S. BANK LAWSUITS:

U.S. Bank Lawsuit over Illegally Using Trust Funds

Last year, US Bank came under fire for using trust fund money to pay for their court cases following the 2008 housing crisis, per Credit Union Times:

In a new lawsuit, the NCUA claimed U.S. Bank and Bank of America unlawfully withdrew money from residential mortgage-backed securities trust funds to pay for their legal costs from court cases following the subprime mortgage debacle that triggered the 2008 financial crisis and led to the demise of several corporate credit unions.

The NCUA filed a 68-page lawsuit and 15 supporting documents on Dec. 5 in U.S. District Court in New York City, which is seeking a court order that would force the banks to pay back all of the investment funds from the trusts that held billions in the subprime residential mortgage-back securities, RMBS. The banks allegedly used these RMBS funds to pay for their legal costs from other investor lawsuits that claimed U.S. Bank and BOA allegedly failed in their duties in managing the RMBS investments. And because the banks allegedly did not fulfill their contractual obligations, the NCUA argued that U.S. Bank and BOA were not entitled to withdraw funds from the trust funds to pay their legal fees.

[…]

The NCUA claimed U.S. Bank and BOA unlawfully withdrew trust funds to pay for cases brought by other investors for breaching their trustee duties and allegedly did not meet their burden of proving their entitlement of indemnification. Based on these claims, the federal agency is asking the federal court to force the banks to return all of the funds they used from the investment trusts to pay their own legal fees and other related costs.

U.S. Bank Lawsuit over Falsifying Overdraft Fees

US Bank has wronged their customers for quite a while, as seen in this 2012 lawsuit summary on PR Newswire. The suit stated that US bank generated false overdraft fees on customers’ debit card transactions:

U.S. Bank has agreed to pay $55 million to settle class action lawsuits that accused the bank of improperly manipulating its customers’ debit card transactions in order to generate excess overdraft fee revenues. The lawsuits, part of multidistrict litigation involving more than 30 different banks entitled In re Checking Account Overdraft Litigation, are pending before U.S. District Judge James Lawrence King in Miami.

The lawsuits claim that U.S. Bank’s internal computer system re-sequenced the actual order of its customers’ debit card and ATM transactions, by posting them in highest-to-lowest dollar amount rather than in the actual order in which they were initiated by customers and authorized by the bank. According to the lawsuits, U.S. Bank’s practice resulted in its customers being charged substantially more in overdraft fees than if the debit card and ATM transactions had been posted in the order in which they were initiated and authorized.

U.S. Bank Lawsuit over Unpaid Loan & Bankruptcy Dispute

In 2017, a long-running US Bank conflict was reignited, according to StarTribune. This case involved an unjust bankruptcy proceeding which killed the business of a U.S. Bank customer who was already in debt to the bank:

A Philadelphia businessman has won a series of court rulings that could clear the way for long-delayed lawsuits seeking more than $70 million against U.S. Bank, which he claims destroyed his company in a dispute over unpaid loans.

The cases involve as much as $12 million that businessman Maury Rosenberg owed the bank, which through an affiliate loaned money to his company, National Medical Imaging (NMI). Rosenberg’s son, Doug, said they do not dispute these were legitimate debts.

But Doug Rosenberg said the bank lost its ability to collect on those debts when it pushed his family’s business empire into involuntary bankruptcy proceedings in 2008. A Florida judge dismissed those proceedings and in 2013 a jury awarded Rosenberg $6.1 million, finding that the bank and its affiliates had acted in “bad faith.”

U.S. Bank Lawsuit over Home Foreclosure Mispractice

CBS Los Angeles had this 2016 report of a US Bank lawsuit involving the bank purposefully allowing foreclosed homes to fall apart and break city codes:

U.S. Bank has agreed to pay $13.5 million to settle Los Angeles city allegations that it let 170 foreclosed homes fall into decay.

The city attorney’s office announced the lawsuit settlement Thursday.

In the wake of the housing crash, U.S. Bank acquired more than 1,500 foreclosed properties in Los Angeles, many vacant or in low-income areas.

The city alleged that 170 were allowed to fall into disrepair in violation of city codes.