$1.23M+ New York Community Bank Settlement Ends Class Action Over ‘Retry’ Fees for ACH, Check Transactions

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New York Community Bank (NYCB), now known as Flagstar Bank, is set to pay $1,233,500 to settle a class action lawsuit that alleged the bank charged accountholders unjustified and excessive fees related to insufficient funds, account overdrafts, automated clearing house (ACH) payments and out-of-network ATM balance inquiries and withdrawals.

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The New York Community Bank class action settlement received preliminary approval from the court on October 6, 2025 and covers current and former accountholders who may fall into one or both of the following groups:

• All NYCB accountholders who were issued one or more insufficient funds or overdraft fees on the same ACH transaction or check between March 2, 2017 and January 1, 2020 (the “Multiple Fees” class); and/or
• All NYCB accountholders who were charged more than one out-of-network (OON) ATM fee who had checked their account balance prior to initiating a cash withdrawal at an OON ATM between August 20, 2020 and February 20, 2024 (the “OON Fees” class).

The court-approved website for the NYCB settlement can be found at https://NYCBSettlement.com/.

New York Community Bank settlement class members do not need to do anything to receive their portion of the settlement fund, and the amount each class member receives will depend on which settlement class they fit into, the settlement site explains. Per the settlement agreement, 73.6 percent of the settlement fund (totaling $907,856) will be allocated to reimburse the “Multiple Fees” group, and 26.4 percent of the settlement fund (totaling $325,644) will be allocated to reimburse the “OON Fees” group.

The settlement agreement outlines two formulas that will be used to determine the payment amount for each eligible class member in the Multiple Fees and OON fees groups:

• Multiple Fees members shall be paid based on dividing 73.6 percent of the net settlement fund by the total number of additional retry fees issued to all applicable class members, multiplied by the number of retry fees charged to each individual class member.
• OON Fees members shall be paid based on dividing 26.4 percent of the net settlement fund by the total number of OON fees issued to all applicable class members, multiplied by the number of OON fees charged to each individual class member.

Importantly, settlement class members can receive both the Multiple Fees payout AND the OON Fees payout, the settlement site adds.

For current NYCB accountholders, the settlement agreement says that their reimbursement will be issued in the form of a credit to the account that was assessed the relevant fees. For former NYCB accountholders, the settlement agreement says that their reimbursement will be issued in the form of a check to the address listed in NYCB’s systems. Settlement checks must be cashed within 180 days of issuance before expiration, court documents state.

NYCB settlement class members who wish to exclude themselves from the settlement and retain any legal rights must send a letter to the settlement administrator stating their desire to be excluded, along with their name, last four digits of current or former account numbers, address, telephone number and email address.

According to the settlement website, a class member must submit a letter to update their address for payment purposes (if necessary) or ask to be excluded from the deal by December 15, 2025, to the address listed here.

The court will determine whether to grant final approval to the NYCB settlement at a hearing on January 13, 2026. Compensation will begin to be distributed to eligible consumers only after final approval is granted and any appeals are resolved.

The New York Community Bank class action lawsuit alleged that the bank violated the New York General Business Law by wrongfully assessing multiple $36 fees on singular items and/or transactions on accounts that were overdrawn or had insufficient funds, and by charging accountholders more than one out-of-network ATM fee when they completed a cash withdrawal preceded by a balance inquiry.

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