On Wednesday, a federal appeals court ruled that Wells Fargo is allowed to post checking-account transactions in a way that would trigger the most overdraft fees, which are paid by customers.
An order that required the bank to pay $203 million in restitution to its customers was also overturned.
Banks have been criticized for posting the largest transactions first to maximize the number of overdraft fees that are charged. After the checking account’s balance plummets, many smaller transactions will result in more overdraft instances.
However, Wells Fargo may still be on the hook for misleading customers on transaction-posting practices.
The Consumer Financial Protection Bureau and a newly proposed bill could address this type of practice.