Alliant Credit Union has faced two significant class action lawsuits addressing different fee practices. The immigration discrimination settlement, finalized in August 2024, resulted in payments to class members who alleged unlawful employment discrimination. Separately, an overdraft fee class action challenged the credit union’s practices around overdraft charges, though that case was dismissed. If you banked at Alliant and were affected by either issue, understanding the outcomes and your potential rights is important.
Alliant is a federally chartered credit union with over a million members nationwide. The company has faced scrutiny over fee practices and employment decisions, leading to these distinct legal disputes. One case resulted in settlement payments to affected members, while the other set legal precedent about how credit unions can structure overdraft fee disclosures. Both cases provide lessons about consumer protections in the financial services industry.
Table of Contents
- THE IMMIGRATION DISCRIMINATION SETTLEMENT—WHAT HAPPENED AND WHO WAS AFFECTED
- THE OVERDRAFT FEE CLASS ACTION—ALLEGATIONS AND DISMISSAL
- HOW THE ALLEGED OVERDRAFT PRACTICES WORKED
- ALLIANT’S POLICY CHANGE—ELIMINATING OVERDRAFT FEES ENTIRELY
- KEY DIFFERENCES BETWEEN THE TWO CASES
- OTHER CREDIT UNION FEE PRACTICES LAWSUITS
- WHAT THESE CASES MEAN FOR CREDIT UNION MEMBERS TODAY
- Frequently Asked Questions
THE IMMIGRATION DISCRIMINATION SETTLEMENT—WHAT HAPPENED AND WHO WAS AFFECTED
In August 2024, a federal judge granted final approval to a class action settlement between Alliant Credit Union and the Mexican American Legal Defense and Educational Fund (MALDEF). The settlement addressed allegations that Alliant discriminated against employees and applicants based on immigration status. The settlement fund totaled $86,750, distributed to class members who participated in the case.
California class members who were eligible received $2,500 each, while national class members outside California received $250 each. The difference in payment amounts reflected the concentration of affected employees in California and the severity of the claims in that jurisdiction. If you worked at or applied to work at Alliant and were denied employment or opportunities based on immigration-related concerns, you may have been eligible for compensation. The case was resolved without Alliant admitting wrongdoing, which is typical in class action settlements.
THE OVERDRAFT FEE CLASS ACTION—ALLEGATIONS AND DISMISSAL
The second major class action, Page v. Alliant Credit Union, was filed in July 2018 in the U.S. District Court for the District of New Jersey. The lawsuit alleged that Alliant misrepresented its overdraft fee practices and charged overdraft fees without obtaining proper consent from account holders through an opt-in process.
The plaintiffs argued that Alliant’s disclosure of how fees would be assessed was unclear and that customers were charged fees they didn’t knowingly authorize. However, the case did not reach a settlement. In 2022, the Seventh Circuit Court of Appeals affirmed the dismissal of the case, finding that Alliant’s account agreements were not ambiguous regarding how the credit union calculated overdraft fees using an available-balance method for non-sufficient funds (NSF) charges. This legal decision meant that even though customers may have felt surprised by overdraft fees, the court determined that the contract language was clear enough that Alliant had no legal obligation to change its practices or compensate class members. For consumers, this underscored the importance of carefully reviewing account disclosures, even when they seem technical or unclear.
HOW THE ALLEGED OVERDRAFT PRACTICES WORKED
Under the fee structure that was challenged in the Page case, Alliant calculated overdraft fees based on the available balance in an account at the time a transaction was processed, rather than the actual balance or the order transactions occurred. This method could result in fees being charged in situations where customers believed they had sufficient funds. For example, if you had $500 in your account and made a $400 debit card purchase, your available balance would drop to $100.
A subsequent $150 check might then trigger an overdraft fee, even if you thought your $500 balance was enough to cover both transactions. The plaintiff in the case argued that this method was deceptive and that customers should have been required to explicitly opt in to overdraft protection before being charged fees. Alliant’s position, which the court upheld, was that the available-balance method was clearly disclosed in the account agreement and that customers had agreed to these terms when opening their accounts. The limitation of this legal outcome was that it set a precedent allowing similar fee structures at other financial institutions, provided they were adequately disclosed—but “adequate disclosure” in financial contracts often means dense, technical language that many consumers don’t fully understand.
ALLIANT’S POLICY CHANGE—ELIMINATING OVERDRAFT FEES ENTIRELY
In August 2021, well before the appellate decision but years after the lawsuit was filed, Alliant Credit Union announced a significant change: it would eliminate overdraft fees on all checking and savings accounts. This policy shift meant that members would no longer be charged overdraft fees when their accounts went negative. Instead, Alliant would decline transactions that would cause an overdraft, protecting members from fees while limiting their ability to make purchases they couldn’t afford.
This change represented a major reversal from the fee-based model that had been the subject of litigation. While the company was not legally required to make this change due to the eventual dismissal of the class action, the policy reflected broader industry trends toward eliminating overdraft fees and the reputational pressure that class actions and consumer complaints can create. For current Alliant members, this policy eliminates one of the major pain points that had sparked the litigation, though it’s important to note that this policy is specific to Alliant and many other credit unions and banks still charge overdraft fees.
KEY DIFFERENCES BETWEEN THE TWO CASES
While both cases involved Alliant Credit Union, they addressed entirely different issues. The immigration discrimination settlement focused on employment practices and alleged bias in hiring and promotion decisions. The overdraft fee case focused on consumer banking practices and the clarity of fee disclosures. Understanding this distinction is important because it means the settlement amounts and eligibility criteria were completely different—you were only eligible for the immigration discrimination settlement if you were a job applicant or employee, not a consumer with a checking account.
Another critical difference is their outcomes. The immigration discrimination case resulted in a settlement with actual payment to class members, meaning affected individuals received compensation. The overdraft fee case was dismissed, meaning no settlement funds were paid out. This is a crucial distinction for consumers trying to determine whether they might be eligible for any compensation. If you were affected by overdraft fees but were not an Alliant employee or job applicant, you would not have received compensation from either case, though you may benefit from the August 2021 policy change if you became an Alliant member after that date.
OTHER CREDIT UNION FEE PRACTICES LAWSUITS
Alliant is not alone in facing overdraft-related litigation. Many credit unions and banks have faced similar class actions challenging overdraft fee practices, disclosure methods, and fee-stacking practices where multiple overdraft fees are charged for a single transaction. Some of these cases have resulted in settlements, while others have been dismissed like the Alliant overdraft case. Industry trends show a gradual shift away from overdraft fees, driven by both litigation and regulatory pressure—but this change has been uneven across different financial institutions.
For consumers evaluating their choice of financial institution, it’s worth comparing overdraft policies across different credit unions and banks. Some institutions charge no overdraft fees as a matter of standard practice, while others still rely on overdraft fees as a revenue source. The Alliant policy change demonstrates that consumer pressure and litigation can drive policy changes, even when legal liability is unclear. If overdraft fees are a concern for you, comparing policies upfront can save you money and frustration.
WHAT THESE CASES MEAN FOR CREDIT UNION MEMBERS TODAY
The two Alliant class actions illustrate important principles about consumer rights and class action litigation. First, they show that class actions can be effective tools for addressing both employment discrimination and unfair consumer practices, even when the outcomes vary. The immigration discrimination settlement provided direct compensation, while the overdraft case, though dismissed, may have contributed to industry pressure that led to Alliant’s policy change.
For current and prospective Alliant members, these cases highlight the importance of reading account agreements carefully and understanding fee structures before opening an account. They also demonstrate that credit unions, like banks, are subject to discrimination laws and consumer protection regulations. If you believe you’ve experienced discrimination or unfair fee practices at any financial institution, documenting your experiences and consulting with an attorney about potential class action claims can be worthwhile, particularly if many customers are likely facing the same issue.
Frequently Asked Questions
Was there a settlement payment for overdraft fees from Alliant?
No. The Page v. Alliant overdraft fee class action was dismissed in 2022, so no settlement was reached and no payments were made to account holders. However, Alliant eliminated overdraft fees in August 2021, which addressed the underlying concern.
Am I eligible for the immigration discrimination settlement?
Only if you were an Alliant employee or job applicant who was subject to discrimination based on immigration status. The settlement provided $2,500 to California class members and $250 to national class members. The settlement was finalized in August 2024.
Does Alliant still charge overdraft fees?
No. As of August 2021, Alliant Credit Union eliminated overdraft fees on all checking and savings accounts. Instead, transactions that would cause an overdraft are declined.
Why was the overdraft case dismissed if customers were allegedly charged unfair fees?
The court determined that Alliant’s account agreements clearly disclosed how overdraft fees would be calculated using an available-balance method. Because the terms were not ambiguous, the court found no legal violation.
Can I still file a claim for overdraft fees I was charged before the policy change?
The class action was dismissed, so there is no official class action claim process. However, you could contact Alliant directly to request a refund of specific fees, though they are not legally obligated to provide one.
What should I look for in credit union overdraft policies?
Compare whether the credit union charges overdraft fees at all, what their opt-in requirements are, how they calculate overdraft transactions, and whether they offer alternatives like declining transactions or linking to savings accounts for overdraft protection.
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