New York Community Bank Fee Settlement: $1.23M

Current or former New York Community Bank checking account holders who were charged retry non-sufficient funds or overdraft fees on check or ACH payments between March 2, 2017 and Jan. 1, 2020, or who were charged multiple out-of-network ATM fees following a balance inquiry between Aug. 20, 2020 and Feb. 20, 2024.

No documentation is required. Eligible customers will be identified through bank records and will receive payments automatically.

If you banked with New York Community Bank and noticed extra fees piling up on your account, you might be owed money. The bank, now operating as Flagstar Financial after a 2024 name change, has agreed to pay $1.23 million to settle a lawsuit claiming it unfairly double-dipped on certain customer fees.

The lawsuit targeted two specific fee practices.

First, customers said the bank repeatedly charged them non-sufficient funds and overdraft fees when the same check or electronic payment was run through their account multiple times.

Second, customers who checked their balance at an out-of-network ATM before making a withdrawal claimed they were charged two separate ATM fees for what was essentially one transaction.

Customers argued these practices didn't match up with what the bank promised in its account agreements. When you sign up for a checking account, the fine print is supposed to spell out exactly when and how fees apply.

The lawsuit claimed the bank went beyond those terms and pocketed extra charges that customers never agreed to pay.

New York Community Bank merged with Flagstar Bank in 2021 and rebranded entirely in 2024. The bank hasn't admitted that it did anything wrong, but it agreed to the settlement to put the dispute behind it.

How Payments Will Work

The good news for affected customers: you don't have to do anything to get paid. There's no claim form to fill out. The bank will use its own records to identify who qualifies and how much they're owed.

If you were charged retry fees or overdrafts on checks or ACH transactions during the first eligibility window, your payment will be based on a proportional share of the settlement fund. The more you were charged in questionable fees, the larger your cut.

Customers who got hit with double ATM fees after checking their balance will receive a flat $25 payment.

How you receive your money depends on your current relationship with the bank. If you still have an account, the payment will show up as a credit. If you've since closed your account, expect a check in the mail.

The deadline to opt out or object to the settlement is Dec. 15, 2025. A court hearing to finalize the deal is scheduled for Jan. 13, 2026.