The Zacks Analyst Blog Highlights: The Royal Bank of Scotland Group plc, JPMorgan Chase, Commerce Bancshares, Bank of America and Wells Fargo

Zacks

For Immediate Release

Chicago, IL – April 30, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include The Royal Bank of Scotland Group plc ( RBS), JPMorgan Chase & Co. ( JPM), Commerce Bancshares Inc. ( CBSH), Bank of America Corporation ( BAC) and Wells Fargo & Co. ( WFC).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s Analyst Blog:

Citizens Settles Overdraft Suit

Citizens Bank, a unit of The Royal Bank of Scotland Group plc ( RBS), has agreed to disburse $137.5 million to settle the lawsuit filed against it by the customers, as reported by Boston. The company was held responsible for maneuvering the transaction entries in order to procure larger overdraft fees. The settlement has yet to be approved by the U.S. District Judge in Miami.

The Back Story

Previously, Citizens was accused of using software programs that manipulated the overdrafts fees charged on the customers’ debit card and ATM transactions. The lawsuit filed by the customers claimed that the transactions were re-sequenced by the company in such a way that the largest withdrawals were deducted first instead of being cleared in the order in which they were received.

As an aftermath, customers’ balances diminished faster, resulting in a larger number of ‘overdrawn’ transactions, each of which then became chargeable. As a result, the customers were charged more than what was rightfully incurred.

Similar Settlements

Recently, in February, JPMorgan Chase & Co. ( JPM) was asked to pay $110 million to clear up the similar lawsuit filed against it. The settlement is still subject to the approval of the District Judge.

Last year, Commerce Bancshares Inc. ( CBSH) paid $18.3 million while Bank of America Corporation ( BAC) was asked to pay a whopping $410 million to the customers to settle the similar lawsuits.

Moreover, in 2010, Wells Fargo & Co. ( WFC) was ordered to repay $203 million by the U.S. District Court of Northern California to recompense customers who had sued the company for charging unfair overdraft fees.

Rules Implemented by the Fed

After several banks were caught indulging in unfair practices to expand their income by overcharging overdraft fees, the Federal Reserve introduced certain regulations to provide more protection to the customers against such malpractices.

Recently, the Consumer Financial Protection Bureau disclosed its intention to scrutinize the overdraft fees charged by the banks as well as the protocol of providing details regarding the overdraft programs to the customers.

Earlier, in 2010, the Fed made it mandatory for the banks to timely reveal the charging of overdraft fees to the customers and to get their approval before initiating the overdraft facility on the debit cards. Likewise, the Federal Deposit Insurance Corporation (:FDIC) also adopted a stern approach towards the exploitation by banks through re-ordering transactions.

However, in spite of the implementation of such regulations, the banks continued to take undue advantage of the customers as there were no rules associated with the arrangement of the transactions.

Nevertheless, after the intervention of the various regulators, banks will no longer be able to charge such hefty fees without informing the account holders.

Our Viewpoint

The announcement of settling unfair overdraft fees will affect Citizens’ financials, but at the same time it will restore customers’ confidence in the federal laws to some extent.

Though the number of the banks involved in charging unfair overdraft fees has been increasing, the steps taken by the regulators are expected to reduce such unfair practices in the near-term. Moreover, the banks will be dissuaded from such misconduct as a result of rising litigation costs as more customers are now opposing such unjust ways of the banks.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com

http://www.zacks.com

Read the analyst report on RBS

Read the analyst report on JPM

Read the analyst report on CBSH

Read the analyst report on BAC

Read the analyst report on WFC

Zacks Investment Research



More From Zacks.com
View Comments (0)