In Carol Tims v. LGE Community Credit Union, the
Eleventh Circuit Court of Appeals held that a credit union's
account agreement with one of its customers was ambiguous about
which account balance calculation the bank would use in assessing
overdraft fees on the customer's account, which exposed the
credit union to potential liability under the Electronic Fund
Transfer Act.
The matter came to the Court on appeal after the trial judge
dismissed the consumer's complaint. The Court first addressed
the history of overdraft fees, highlighting the rise of Electronic
Fund Transfer (EFT) systems. While convenient for customers, these
EFT systems led to a substantial increase in overdraft fees, and
corresponding consumer complaints. In response, Congress
implemented the Electronic Fund Transfer Act, which required
customers to give affirmative consent to overdraft services through
an opt-in notice. As part of the Act, banks are required to give
notice as to which method they
