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Hayes v. First Source Federal Credit Union

Breach Claims Against Bank Over Overdraft Fees Denied Dismissal

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MEMORANDUM DECISION AND ORDER I. INTRODUCTION Plaintiffs Sharon Hayes and Carie Warmack bring this putative class action under 28 U.S.C. §1332(d) asserting claims against Defendant First Source Federal Credit Union for breach of contract, including breach of implied covenant, and for deceptive acts or practices prohibited under Section 349 of the New York General Business Law. (Dkt. No. 13). Currently before the Court is Defendant’s motion to dismiss the amended complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Dkt. No. 17). The motion is fully briefed. (Dkt. Nos. 17-1, 20, 21). For the following reasons, the Court denies Defendant’s motion to dismiss. II. FACTS¹ Defendant “is a bank” headquartered in New Hartford, New York, “with over $930 million dollars in assets.” (Dkt. No. 13, 11). Plaintiffs are residents of New York and have checking accounts with Defendant. (Id.

8, 10). Plaintiffs allege that during the relevant time period, i.e., prior to February 2023, Defendant’s account documents (the “Account Documents”)² “contain[ed] explicit terms indicating that fees,” specifically overdraft fees or fees for insufficient funds, would “only be assessed once per check or item.”³ (Id. 24). More specifically, Plaintiffs allege that these Account Documents “indicate that a singular fee can be assessed on checks, ACH debits, and electronic payments,” and that Defendant “will charge a single fee per item that is returned due to insufficient funds.” (Id.

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