Feld v. Apple Bank for Savings

NEW YORK COUNTY
Banking

New York Law Journal

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Justice Eileen Bransten

Apple Bank moved for dismissal of Feld's putative class action complaint. Feld alleged Apple engaged in an unlawful and improper practice in imposing overdraft fees on savings and checking account customers. He asserted claims for breach of contract, Banking Law §14-a and General Obligations Law §5-501 violations, among others. Apple asserted Feld did not incur all the types of fees he complained of, noting it fully disclosed in writing all its procedures and fees relating to overdrafts when Feld first enrolled as a customer. The court agreed noting Feld was provided with booklets setting forth the methodology used in making funds available after deposit, and that an overdraft fee would be charged regardless of the bank's decision to pay or decline to pay for an item. Thus, it found Feld's claim based on allegations of breach of contract fatally defective, dismissing it. The court also found the overdraft fee assessed for each insufficient fund item (NSF) was not interest, noting it was imposed because the NSF occurred, not because the bank honored the NSF item. Hence, the charge was not incurred in consideration for an extension of credit, and did not meet the statutory definition of interest, dismissing the §14-a and §5-501 claims.

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