Overdraft fees
SunTrust Bank v. Bickerstaff
Date: April 17, 2025
Issue: Are SunTrust’s overdraft fees considered interest and subject to usury limitations under Georgia law?
Case Summary: ABA filed an amicus brief urging the Georgia Supreme Court to reverse a Georgia Court of Appeals decision that ruled overdraft fees are subject to Georgia usury laws.
In 2010, Jeff Bickerstaff sued SunTrust, claiming the bank’s overdraft fees constituted unlawful interest charges that violated Georgia’s civil and criminal usury laws. Under Georgia’s usury law, licensed lenders cannot charge more than 10% on a loan of $3,000 or less. Bickerstaff alleged SunTrust advanced money to him in amounts less than $3,000 and collected overdraft fees for each advance, which exceeded the 10% limit.
SunTrust argued its overdraft fees did not constitute interest, but the trial court denied its motion for summary judgment. According to the trial court, the overdraft fees were subject to Georgia’s usury law. The trial court also determined that whether an overdraft fee qualifies as interest under Georgia’s usury law is a material question of fact to be resolved by the jury. On appeal, the Georgia Court of Appeals affirmed the trial court’s decision.
ABA filed its amicus brief supporting SunTrust. First, ABA argued overdraft fees are not subject to Georgia’s usury law because overdraft fees are not interest. ABA explained that interest involves money-use charges, typically computed at a set rate based on a principal balance. In contrast, overdraft fees are flat charges for a service, not calculated based on time or amount borrowed. Since overdraft fees do not meet Georgia’s legal definition of interest, ABA concluded they fall outside the scope of the usury law.
Second, ABA argued that the Georgia Legislature and state bank regulators have confirmed overdraft fees are not interest. In 2014, the Legislature amended the usury statutes to state explicitly that “overdraft fees shall not be considered interest.” ABA noted this amendment clarified, rather than changed, the definition of interest by distinguishing financial charges from interest. Also, in 2013, the Georgia Department of Banking and Finance issued a declaratory order confirming overdraft fees on deposit accounts are not subject to state usury limits.
Finally, ABA argued that nearly every court agrees that overdraft fees do not qualify as interest. By refusing to adopt this position, the Court of Appeals took a stance that conflicts with both persuasive Georgia authority and the overwhelming consensus in other courts. ABA emphasized the Tenth and Eleventh Circuits have ruled that overdraft fees are not interest, and nearly every federal court addressing the issue has reached the same conclusion. Yet, the trial court failed to acknowledge — let alone analyze — the reasoning behind these rulings. ABA urged the Georgia Supreme Court to align with the Tenth Circuit, Eleventh Circuit, and numerous federal courts by holding that overdraft fees are not interest.
Bottom line: ABA urged the Georgia Supreme Court to conform to the decisions of the Tenth Circuit, Eleventh Circuit, and various federal courts and hold overdraft fees are not considered interest.
Documents: Amicus brief
