U.S. Bank Facing Class Action Over Alleged ‘Pay-to-Pay’ Fee Charged to Mortgage Borrowers who Pay by Phone, Online

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From New York’s Northern District comes a proposed class action in which a consumer claims U.S. Bank, N.A. charges an illegal $5 fee to borrowers who attempt to make mortgage payments through the institution’s automated phone system or online.

The plaintiff, who has allegedly paid the unlawful “pay-to-pay” fee “at least 44 times,” claims the actual cost for U.S. Bank to process online and over-the-phone mortgage payments is well below the $5 charged by the bank. The defendant instead pockets the difference, the lawsuit alleges. 

“Despite its uniform contractual obligations to charge only fees explicitly allowed under the mortgage, applicable law, and only those amounts actually disbursed, U.S. Bank leverages its position of power over homeowners and demands these excessive and unfair Pay-to-Pay Fees,” the complaint reads.

Even if such fees were allowed in borrowers’ contracts, the case continues, U.S. Bank’s mortgage covenants allow for the bank to pass along “only the actual cost of fees incurred to it to the borrower.” No stipulation allows for U.S. Bank to profit from such transactions, according to the lawsuit.

Included in the proposed class are all individuals with a New York address to whom U.S. Bank and its agents “charged, collected, or attempted to collect” fees for the use of debit card or debit automatic clearing house (ACH) mortgage payments from the earliest date of the applicable statute of limitations through when a court grants class certification.