Fifth Third Bank has faced multiple legal challenges related to overdraft fee practices, including a proposed class-action lawsuit filed in October 2023 by checking account holders Christy Hunter and Feon Smith-Branch in U.S. District Court in Cincinnati. The lawsuit alleged that the bank improperly charged overdraft fees on approved transactions, a practice that has drawn scrutiny from federal regulators and Congress.
While that particular case was voluntarily dismissed in January 2024, Fifth Third Bank’s overdraft practices remain under regulatory scrutiny. In July 2024, Fifth Third Bank settled with the Consumer Financial Protection Bureau (CFPB), agreeing to pay $20 million in total compensation—$15 million for sales practices violations and $5 million for auto finance servicing issues. This settlement underscores ongoing concerns about how the bank manages customer accounts and charges fees. For customers who believe they’ve been charged improper overdraft fees, understanding the history of these disputes and their legal options is essential.
Table of Contents
- What Overdraft Fees and Charging Practices Are at Issue?
- Recent Regulatory Action and Congressional Attention
- The Timeline of Legal Action Against Fifth Third
- Understanding Your Rights if You Were Affected
- Why Overdraft Fee Practices Matter for Consumers
- How the CFPB Settlement Impacts Customers
- What’s Ahead for Fifth Third and Overdraft Accountability
- Conclusion
What Overdraft Fees and Charging Practices Are at Issue?
overdraft fees occur when a bank account goes below zero and the bank covers the shortfall, typically charging a fee for this service. The controversy surrounding Fifth Third Bank centers on how and when these fees are assessed. In the October 2023 lawsuit, customers alleged that Fifth Third was improperly charging overdraft fees on transactions that should have been approved based on available account balances. This distinction matters significantly: if a customer has sufficient funds to cover a transaction, they shouldn’t be charged an overdraft fee for it. A historical settlement from the Schulte v.
Fifth Third Bank case illustrates a related practice concern. Fifth Third had posted debit card transactions and ATM withdrawals in non-chronological order rather than processing them in the sequence they actually occurred. By processing larger transactions first, the bank could trigger overdrafts on subsequent smaller transactions that would have cleared if processed in the correct chronological order. That settlement resulted in $9.5 million in compensation for eligible customers with accounts between October 21, 2004 and July 1, 2010. The practice of non-chronological posting has been a persistent issue across the banking industry, with many institutions eventually paying significant settlements over it.
Recent Regulatory Action and Congressional Attention
The July 2024 CFPB settlement represents the most recent major enforcement action against Fifth Third’s practices. The settlement addressed not only the core overdraft issue but also sales practices violations, suggesting the CFPB found problematic behavior across multiple customer-facing areas of the bank’s operations. The total $20 million payment indicates substantial regulatory concern about how the bank manages its relationships with customers and charges fees. Beyond the CFPB settlement, Fifth Third has faced direct attention from Congress.
In August 2025, the Senate Banking Committee sent a letter to Fifth Third Bank CEO Tim Spence specifically regarding the bank’s overdraft practices. Congressional letters to financial institutions typically signal that lawmakers are monitoring the situation and may consider legislative action if problems persist. This level of attention suggests that overdraft practices remain a concern worthy of congressional scrutiny, even after the CFPB settlement. For customers, this indicates that the issue is taken seriously at the highest levels of financial regulation and oversight.
The Timeline of Legal Action Against Fifth Third
The October 2023 lawsuit filed by Christy Hunter and Feon Smith-Branch represented a significant moment in Fifth Third’s overdraft dispute history. The case was filed in U.S. District Court in Cincinnati, the city where Fifth Third Bank is headquartered, in the Eastern District of Ohio. The named plaintiffs alleged violations of federal law (the Electronic Fund Transfer Act), state law, and Fifth Third’s contract with customers.
However, the plaintiffs voluntarily dismissed the case in January 2024, just three months after filing. The reason for the voluntary dismissal wasn’t disclosed in public filings, but voluntary dismissals in class-action cases can occur for various reasons: settlement discussions, legal strategy changes, or agreement between the parties. The dismissal meant that this particular lawsuit did not result in a settlement or judgment, though it does indicate that customers were sufficiently concerned about Fifth Third’s practices to file suit in federal court. The timing of the dismissal—before the CFPB settled its own enforcement action—may suggest coordination or related developments between the legal challenge and regulatory action.
Understanding Your Rights if You Were Affected
If you were a Fifth Third Bank customer and believe you were charged improper overdraft fees, your path forward depends partly on the timing of your account relationship with the bank. For customers who held accounts between October 21, 2004 and July 1, 2010, the historical Schulte v. Fifth Third Bank settlement may be relevant. That settlement has a defined class period and specific eligibility requirements.
Customers from that era who experienced the non-chronological posting issue may have been entitled to compensation from the $9.5 million settlement fund, though the claims period for that settlement may have already passed. For more recent overdraft concerns related to improper charges on approved transactions, the situation is less clear due to the voluntary dismissal of the 2023 lawsuit. However, the CFPB settlement in July 2024 indicates ongoing regulatory concern about Fifth Third’s practices. If you believe you were overcharged, you have several options: file a complaint with the CFPB (which investigates consumer financial grievances), contact your state’s attorney general’s office, or consult with a lawyer about potential individual claims or participation in future class actions. Comparing your account statements against the bank’s policies can help identify any questionable charges.
Why Overdraft Fee Practices Matter for Consumers
Overdraft fees can quickly drain account balances, particularly for customers living paycheck-to-paycheck. A single overdraft fee typically ranges from $25 to $35, but customers can incur multiple fees if several transactions overdraw the account on the same day. Over time, these fees can total hundreds of dollars per year for affected customers. The practices that Fifth Third faced scrutiny for—improperly assessing fees on approved transactions or manipulating transaction order to create overdrafts—amplify this problem by charging fees that shouldn’t exist under reasonable banking practices. One critical limitation to understand: even if a bank settles a lawsuit or enforcement action, that settlement doesn’t automatically mean you receive compensation.
You typically must file a claim demonstrating that you were a customer during the relevant period and were affected by the challenged practices. For older settlements like Schulte v. Fifth Third, claim periods close and funds may be redistributed if insufficient claims are filed. Additionally, settlements often result in claims being split among many customers, so individual compensation amounts can be modest. This is why staying informed about settlement deadlines and claim procedures is essential—missing a deadline means missing your opportunity for compensation.
How the CFPB Settlement Impacts Customers
The $20 million CFPB settlement in July 2024 demonstrates federal enforcement authority, but understanding what the settlement actually requires Fifth Third to do is important for future protection. CFPB settlements typically include both monetary payments and injunctive relief—requirements that the bank change its practices going forward. The settlement amount and structure (distinguishing between sales practices violations and auto finance servicing issues) indicate that the problems extended beyond overdraft fees alone, though overdraft practices appear to have been part of the regulatory concern.
Going forward, Fifth Third customers should expect the bank to have more robust oversight of its overdraft charging practices due to the CFPB settlement. However, settlements don’t eliminate all risk of problematic practices, and regulatory oversight continues. The August 2025 Senate Banking Committee letter suggests that congressional attention hasn’t waned even after the CFPB settlement was reached, indicating that lawmakers believe additional scrutiny is warranted.
What’s Ahead for Fifth Third and Overdraft Accountability
The ongoing congressional attention to Fifth Third’s overdraft practices suggests this issue isn’t fully resolved despite the 2024 CFPB settlement. Senate interest in overdraft practices reflects broader legislative efforts to address what many consider predatory banking practices that disproportionately harm customers with lower incomes.
Future legislative changes could impose new restrictions on how banks calculate and assess overdraft fees, or could establish new notification and opt-in requirements for overdraft coverage. For Fifth Third specifically, the combination of a major CFPB settlement, renewed congressional scrutiny, and a history of overdraft-related legal disputes suggests the institution is under sustained pressure to reform its practices. Customers should monitor their accounts carefully and stay informed about any future regulatory developments or class-action filings, as these situations often evolve over time with new allegations or violations discovered during implementation of prior settlements.
Conclusion
Fifth Third Bank’s history with overdraft fee disputes—from the historical Schulte settlement over non-chronological transaction posting to the 2023 class-action filing and 2024 CFPB enforcement action—demonstrates that overdraft practices remain a significant consumer protection concern. The $20 million CFPB settlement in July 2024 and subsequent Senate Banking Committee attention in August 2025 underscore that regulators and lawmakers continue to view Fifth Third’s practices as problematic enough to warrant oversight and enforcement action.
If you believe you were affected by Fifth Third Bank’s overdraft practices, review your account statements and claim history, determine whether you fall within any relevant settlement class periods, and consider filing a complaint with the CFPB if you have recent concerns. While older settlements may have passed their claim deadlines, staying informed about any future developments in this case or related regulatory action is important. Consumer vigilance and regulatory pressure remain the most effective tools for holding financial institutions accountable and recovering compensation for improper fees.