Military customers of USAA Federal Savings Bank could receive a staggering amount from a $64 million settlement.
Some service members will be eligible to earn $20,000 under the deal that has been years in the making.
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The settlement comes after five military personnel accused the bank of violating military protections and charging false fees, My Saint Anthony reported.
Although the bank maintains its innocence in the case, it has agreed to pay $64 million to more than 200,000 military personnel and lawyers representing the plaintiffs.
Philip Bulls, Dean Brink, Carmin Nowlin, Nicholas Prado and Raphael Riley – the four plaintiffs named in the lawsuit – will receive $20,000.
The men’s lawyers can ask for up to 27.5% of the settlement, giving them a payout of $17.7 million.
The other $33 million will go to members who sent in remediation checks but never cashed them.
Despite the payments, the bank vehemently denies any wrongdoing and said it always goes above and beyond for its military customers.
“Before this lawsuit was filed, we had already compensated members for errors that may have occurred related to the allegations in the lawsuit,” USAA director of public affairs Roger Wildermuth told MySA.
“Approximately half of the announced settlement amount is simply the reissuance of checks we had previously sent out that our members never cashed.
“USAA strongly disagrees with the allegations in the lawsuit, but this settlement is in the best interests of our members and allows USAA to avoid lengthy and expensive litigation so we can focus on providing exceptional service.”
The lawsuit began after USAA was ordered to send checks to military personnel in 2019 and 2020 in response to federal agencies alleging the bank violated federal law.
According to My San Antonio, the bank sent a total of 859,000 checks to members for violating laws.
Although the bank paid its members for the violations, the plaintiffs in the 2021 lawsuit argue that the checks were not enough to fully cover the costs incurred for customers.
Plaintiffs alleged there was inadequate documentation about how the checks’ value was determined, and some said the checks could not be cashed.
The plaintiffs also accused the bank of failing to reduce interest rates during active employment, a requirement of federal military protection.
USAA strongly disagrees with the allegations in the lawsuit, but this settlement is in the best interests of our members and allows USAA… to focus on providing exceptional service.
Roger Wildermuth
The complainants said the banks “hid their excessive charges from thousands of military families.” Militar.com reported.
The lawsuit said, “Despite their representations to plaintiffs and other class members, defendants have failed to comply with the SCRA and the terms of their USAA Military Benefits Program.”
The plaintiffs also argued that the bank did not “forgive accrued interest, including certain fees and charges, as required by SCRA and the USAA Military Benefits Program.”
Who is eligible?
Money from the USAA settlement will go to members who received remediation checks in 2021 and never cashed them. About 210,000 USAA members will receive payment from the lawsuit.
USAA and the plaintiffs have met several times over the past three years to try to reach a settlement.
The final settlement involved two former district court judges and several meetings beginning in 2022
After three stalled negotiations, the terms of the deal were finally agreed on July 2, 2024.
What is a class action settlement?
Class action lawsuits offer groups of people, or “classes,” a way to come together in court.
These lawsuits are often filed by one or a few people who allege that a company or other entity has harmed a large group of people.
When a lawsuit becomes a class action, it extends to all “class members,” or people who may have similar claims to those who filed the lawsuit.
Companies often settle class actions – offering payment to class members who typically waive their right to pursue legal action by accepting money.
These payment agreements often include statements from the defendant denying wrongdoing. Companies tend to settle class actions to avoid the costs of further litigation.
Pollution, discrimination or false advertising are some examples of what can lead to a class action lawsuit at a company’s door.
This story originally appeared on The-sun.com read the full story
