Vancity Reaches Out-Of-Court Class Action Settlement to Compensate Members for Certain Overdraft Fees

Vancouver, June 7, 2012. Vancity announces a court approval of a settlement in the “Smith class action” lawsuit, which, in certain circumstances, compensates eligible members and former members who incurred overdraft fees between January 1, 1988 and February 4, 1997. The Smith settlement is an extension of a previous settlement (MacKinnon) from a 2004 class action lawsuit regarding certain overdraft administration fees that were previously charged to members; however it is for a different time period.

Existing and former members who held a deposit account at Vancity and paid one or more overdraft administration fees between January 1, 1988 and February 4, 1997 may be entitled to receive a refund for a portion of the fees paid.

“We’re a member run cooperative and our members’ interests are important to us. We believe the settlement we have reached is a fair compromise and the right thing to do for our members,” said Rick Sielski, Chief Operating Officer, Member Services. “Like many other financial institutions, we have always viewed this overdraft administration fee as a service charge that did not contravene laws related to interest charges. It’s a gray area of the law and one which we decided to settle in the interest of our membership.”

Under the Smith settlement, Vancity has set aside a fund of $2.5 million to pay claims by eligible members and/or former members, administration costs of the claims process, and the plaintiff's lawyers' fees in an amount to be determined by the Court. The out-of-court settlement does not constitute an admission of liability against Vancity but rather compromise of disputed claims between the two parties.

Members and former members who are eligible to receive a refund will have the opportunity to donate their funds if they wish to the Vancity Community Foundation to help support community financial literacy initiatives. Any extra funds remaining after all legal fees, administrative costs and claims have been paid will also be donated to the Vancity Community Foundation for financial literacy initiatives.

Vancity has appointed a dedicated team of specialists to answer questions at 604-707-4292 or toll-free at 1-877-707-4292 between 9 a.m. and 5 p.m. Monday – Friday.

About Vancity:
Vancity is Canada’s largest community credit union with $16.1 billion in assets, more than 479,500 members and 59 branches throughout Metro Vancouver, the Fraser Valley, Victoria and Squamish. Vancity has distributed $221 million to members through dividends and to communities through grants and community investment initiatives since 1994. We are a member of the Global Alliance for Banking on Values – a network of the world’s leading sustainable banks sharing the commitment to achieving triple-bottom-line impact through responsible banking practices and Living Wage Employer. For more information visit vancity.com.

Media Contact:
Lorraine Wilson
778-837-0394
mediarelations@vancity.com