Earlier this year, talk about the big class action against Bank of America was all about money -- the billion dollars or so in statutory damages, the $284 million in compensatory damages, and of course the correspondingly large contingency fee due the plaintiffs lawyers. That all changed Monday when California's 1st District Court of Appeal struck down a trial court's ruling that the bank may not withdraw Social Security funds from customer accounts to pay for overdrafts and overdraft penalties.
Details here from The Recorder via Law.com. The Court's opinion is Miller v. Bank of America, No. A110137 (1st App. Dist., Div. 3).
The Court stated:
In Kruger v. Wells Fargo Bank (1974) 11 Cal.3d 352 (Kruger), the California Supreme Court prohibited a bank from utilizing the banker’s setoff against public benefits to recover on an account holder’s delinquent but separate credit card account. In this case, the trial court applied Kruger to prohibit the defendant Bank of America from collecting for overdrafts and fees by debiting directly deposited Social Security and other public benefit payments. This application of Kruger is an extension of its holding that is unwarranted in light of significant differences between the banker’s setoff addressed in Kruger and the facts of this case. Accordingly, we reverse the judgment.