$25 Payment for All – ATM users in America to automatically get extra money thanks to $1.23 Million ‘fees’ settlement

Flagstar Financial, formerly known as New York Community Bank (NYCB) until 2024, has agreed to a $1.23 million settlement after facing claims that it charged customers unfair ATM and non-sufficient funds (NSF) fees. The bank has denied wrongdoing but agreed to settle to avoid further litigation.

The case affects customers who had checking accounts with the bank between March 2017 and February 2024. It involves two types of alleged improper charges — overdraft-related fees and out-of-network ATM balance inquiry fees.

The settlement ensures that eligible customers will automatically receive compensation, either through account credit or mailed checks, without having to fill out a claim form.

Who Is Eligible for the Settlement?

The settlement covers two groups of customers who may have been affected:

Type of Fee	Eligibility Period	Description
Retry or Overdraft Fees	March 2, 2017 – January 1, 2020	Customers charged NSF or overdraft fees on check or ACH payments
Out-of-Network ATM Fees	August 20, 2020 – February 20, 2024	Customers charged multiple out-of-network ATM fees after a balance inquiry

Customers from both categories qualify if they had a checking account with NYCB or Flagstar Financial during the listed periods and were charged the specified fees.

Those who still have active accounts will receive payments as account credits. Former account holders will get checks mailed to their last known address.

How Much You Can Get Paid?

The settlement will distribute payments in two ways: proportional refunds and flat-rate payments.

Payment Type	Who Receives It	Estimated Amount
Proportional Refund	Customers charged NSF or overdraft fees	Based on total fees paid
One-Time Flat Payment	Customers charged OON ATM fees preceded by a balance inquiry	$25

While $25 might seem modest, the payout represents a win for consumers who were unknowingly charged multiple fees for routine ATM transactions.

There is no need to submit any paperwork or proof of purchase — payments will be processed automatically once the court grants final approval.

Why was the Bank Sued?

The plaintiffs alleged that the bank’s fee structure violated its own policies and consumer protection laws. Specifically, they accused the institution of:

• Charging retry fees for transactions that had already been declined due to insufficient funds
• Imposing multiple ATM withdrawal fees when a balance inquiry was performed before withdrawal

These practices, according to the lawsuit, unfairly penalized customers and violated the terms of their account agreements.

While Flagstar Financial has not admitted wrongdoing, it agreed to the $1.23 million settlement to resolve the dispute and move forward.

Consumer advocate Linda Morales noted that this case underscores how small transaction fees can add up to millions in penalties for consumers. “Even a few dollars here and there, multiplied across thousands of customers, becomes a major issue,” she said.

What Is a Class-Action Settlement?

A class-action lawsuit allows individuals with similar complaints to join together and seek compensation from a company accused of wrongdoing.

When such cases are settled, affected individuals automatically become part of the settlement class unless they choose to opt out. By accepting payment, class members usually waive their right to sue separately.

These settlements often resolve disputes quickly while compensating customers for the harm caused, even if companies deny liability.

How to Get Paid?

Eligible customers do not need to take any action to receive compensation.

Step	Description
1. Eligibility Check	The bank will identify affected customers based on transaction records.
2. Automatic Payment	Active account holders will get an account credit. Former customers will get checks.
3. Opt-Out Deadline	Customers who do not want to participate must opt out by December 15, 2025.
4. Final Approval	The court’s final hearing is scheduled for January 13, 2026. Payments will follow after approval.

Payments will be sent automatically after the approval hearing, meaning customers could see funds in early 2026.

What the Settlement Means for Consumers?

This settlement follows a pattern of increased scrutiny over how banks handle overdraft and ATM fees. Several major institutions have faced lawsuits over similar practices in recent years.

Financial expert David Kramer explains that these cases are reshaping how banks structure fees. “Consumers are more aware now, and regulators are watching closely,” he said. “Settlements like this push banks to simplify their fee policies and increase transparency.”

The outcome is likely to influence how financial institutions nationwide handle small but recurring transaction fees.

Why This Case Matters?

The case highlights how hidden banking fees can lead to widespread consumer frustration. It also shows that even smaller settlements can have a large impact by encouraging banks to improve compliance and protect consumers.

For many Americans, this case is another reminder to monitor account statements and question unusual fees.

Banking advocate Sarah Coleman said, “This is a wake-up call for customers to check their bank statements regularly and understand their rights. Many people don’t realize they’ve been charged unfairly until years later.”

Key Dates to Remember

Event	Date
Opt-Out Deadline	December 15, 2025
Final Approval Hearing	January 13, 2026
Payment Distribution	Expected in early 2026

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