United States District Court, D. Massachusetts
MARK BETTENCOURT, Individually and On Behalf of All Others Similarly Situated, Plaintiff,
JEANNE D'ARC CREDIT UNION and DOES 1 Through 100, Defendants.
MEMORANDUM & ORDER
Nathaniel M. Gorton, United States District Judge.
Mark Bettencourt (“Bettencourt” or
“plaintiff”) brings this putative class action
against Jeanne D'Arc Credit Union and numerous unnamed
potential parties who are agents, partners, joint venturers,
subsidiaries and/or affiliates of that financial institution
(collectively “JDCU” or
“defendants”). Bettencourt alleges that JDCU
improperly charged him and other customers overdraft fees
notwithstanding balances in their respective checking
accounts sufficient to defray the subject purchases.
Bettencourt claims that JDCU's policy constitutes, among
other things, a breach of contract and a violation of
Regulation E of the Electronic Fund Transfer Act (“the
EFTA”), 15 U.S.C. § 1693 et seq. He seeks to
certify three classes comprising similarly situated customers
before this Court is defendants' motion to dismiss. For
the following reasons, that motion will be allowed, in part,
and denied, in part.
is a resident of Hopkinton, New Hampshire. JDCU is a credit
union headquartered in Lowell, Massachusetts, with numerous
branches in Massachusetts and one office in New Hampshire. At
some point before 2014, Bettencourt opened a checking account
creating that account, plaintiff entered into two contracts
with defendants. The first agreement was titled “Terms
and Conditions of Your Account” (“the Account
Agreement”). That contract prescribed the rights and
obligations of the account holder and the credit union.
Included in the agreement was JDCU's policy on
withdrawals and overdraft fees. An overdraft fee is a charge
imposed by a financial institution when a customer makes a
purchase for an amount that exceeds his or her account
are two methods by which an overdraft fee can be calculated.
The first is based on the “ledger” or
“actual balance” which is the standing balance of
the member's account less any payments that have actually
been processed. A second method is based on the
“available balance” which is the standing balance
less any “holds” on deposits and pending debits
that have not yet been posted. The “available
balance”, therefore, may be substantially lower than
the “actual balance”.
Account Agreement provides, in relevant part, that:
1) We [JDCU] may determine the amount of available funds in
your account for the purpose of deciding whether to return an
item for insufficient funds at any time between the time we
receive the item and when we return the item or send a notice
in lieu of return . . . [and [w]e need only make one
determination, but if we choose to make a subsequent
determination, the account balance at the subsequent time
will determine whether there are insufficient available
2) [W]e may, at our discretion, honor withdrawal requests
that overdraw your account . . . [but] the fact that we may
honor withdrawal requests that overdraw the account balance
does not obligate us to do so later; and
3) Our payment policy will cause your largest, and perhaps
most important, items to be paid first . . . but may increase
the overdraft or NSF fees you have to pay if funds are not
available to pay all of the items . . . [and] [i]f an item is
presented without sufficient funds in your account to pay it,
we may, at our discretion, pay the item (creating an
overdraft) or return the item (NSF).
(emphasis added). The Account Agreement also contains a
so-called Funds Availability Policy which describes
JDCU's practice of withholding availability of certain
deposits for some period of time.
second agreement that Bettencourt entered into with JDCU was
an “Opt-In Contract” which describes JDCU's
overdraft service policy for non-recurring transactions as
required by Regulation E of the EFTA. 12 C.F.R. §
1005.17. The contract provides that JDCU will “not
authorize and pay overdrafts caused by one-time debit card
transactions unless you authorize us to do so”. It
defines “overdraft” as
occur[ing] when you do not have enough money in your
account to cover a transaction, but we pay it anyway.
the Account Agreement nor the Opt-In Contract defines the
terms “insufficient funds”, “available
funds” or “account balance” nor does the
Funds Availability Policy link the availability of funds for
withdrawal to the charging of overdraft fees. Nor does either
agreement state that overdraft fees will be charged as a
result of holds placed on funds designated for pending
transactions. JDCU maintains, however, that the agreements,
considered together, clearly articulate that overdraft ...