NEWBURGH, Ind. — Heritage Federal Credit Union has agreed to pay $635,000 to settle a class action lawsuit alleging it improperly assessed certain overdraft fees on member debit card accounts, according to reporting by ClassAction.org.
The $1-billion credit union denied wrongdoing but agreed to the settlement to avoid the cost and uncertainty of continued litigation, ClassAction.org said.
The settlement received preliminary court approval on Oct. 15, 2025, and covers current and former accountholders who were charged overdraft fees in two circumstances: debit card transactions that did not actually overdraw an account between Dec. 20, 2021, and April 8, 2025, and transactions that were authorized when sufficient funds were available but later settled with a negative balance between Dec. 20, 2012, and April 8, 2025.
A final approval hearing is scheduled for March 6, when the court will decide whether to grant final approval to the agreement. Any payments will be distributed only after final approval and the resolution of any appeals. The lawsuit alleged the overdraft practices violated the Indiana Deceptive Consumer Sales Act, ClassAction.org reported.