MEMORANDUM-DECISION AND ORDERI. INTRODUCTION Plaintiff seeks to bring a class action lawsuit alleging that SEFCU improperly charges overdraft fees to its customers even when their accounts contain enough funds to cover the transactions presented for payment. See Dkt. No. 1 at 3. According to Plaintiff, this practice violates SEFCU’s contracts with its customers, Regulation E of the Electronic Fund Transfer Act (15 U.S.C.A. §§1693 et seq.) (hereinafter, “Regulation E”), and Section 349 of New York General Business Law, which prohibits deceptive trade practices. Id. at
3-4, 84. Defendant SEFCU has moved to dismiss the Complaint for lack of standing, and that motion is presently before the Court.II. BACKGROUNDA. Facts1. Regulation ERegulation E, which was enacted by the Federal Reserve Board in 2010 to protect consumers from overdraft fees, requires financial institutions to obtain affirmative consent from their customers before charging overdraft fees on ATM and one-time debit card transactions. Id. at 21. To abide by Regulation E, the financial institution must (1) provide the customer with a copy of the overdraft policy, which includes the amount of the charge and maximum number of fees that may be charged, (2) inform the customer of the options that he or she has to avoid overdraft fees, if such options exist, and (3) obtain “opt-in consent” for the overdraft policy, separate from other consents and acknowledgments, that serves no purpose other than to opt into the overdraft program, and is not selected by a preselected checked box. Id. at 22; see also 12 C.F.R. §1005.17. Additionally, the financial institution may not provide different terms for the account depending on whether the customer opted in to the overdraft program. See Dkt. No. 1 at 22; see also 12 C.F.R. §1005.17.2. SEFCU’s Practice of Charging Overdraft FeesSEFCU is a federally chartered credit union operating 46 branches in upstate New York, and is a “financial institution” within the meaning of Regulation E. See Dkt. No. 1 at 6; 12 C.F.R. §1005.2(i). Defendants Does 1-100 are agents, partners, joint ventures, subsidiaries, and/or affiliates of SEFCU, and those persons who own and/or operate SEFCU branch locations. See Dkt. No. 1 at 7. Like many financial institutions, SEFCU charges its customers an overdraft fee when it determines that a customer’s account has been overdrawn. Id. at 16. In order to comply with Regulation E, SEFCU uses a form that allows customers to opt-in to the overdraft protection program (the “Opt-In Contract”). Id. at 24.According to Plaintiff, SEFCU improperly uses an artificial balance to determine whether enough funds exist in an account for a transaction to clear. Id. at 28. The artificial balance is calculated by subtracting “anticipated future debits (debits that may or may not occur) and…deposit holds” from the actual amount of money in the customer’s account. Id. As a result, the customer may be charged an overdraft fee even if the account has enough funds to cover the transaction. Id. at
