SAN FRANCISCO — Bank of America dodged what might have been a $2 billion bullet on Monday when the California Supreme Court unanimously ruled that a practice used by many banks for covering overdrafts and penalty fees is perfectly legal.
The long-awaited ruling will be welcomed by the banking industry, with several agencies — including the American Bankers Association and the U.S. Department of Justice — arguing in amici curiae briefs that an unfavorable opinion could have forced financial institutions nationwide to undertake a “massive overhaul” of their practices.
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