Mortgage lawsuits, new consumer protection rules, and financial reform will be a boon for the legal industry
The more consumers and investors feel wronged by banks, the better business gets for attorneys. As mortgage-related lawsuits continue to drag on and new financial regulation implementation begins, lawyers should have no trouble finding billable hours. Earlier this week, we saw an example of how much lawyers stand to gain as these cases begin to wrap up though Bank of America's class action settlement over excessive overdraft fees. We should expect banks' legal bills to continue to pile up.
The Overdraft Settlement Score: Consumers $410 million, Lawyers $123 million
Bank of America customers who were charged excessive overdraft fees for electronic transfers will be pleased to hear that they may be eligible for some compensation. A court approved a settlement this week where BOA will pay $410 million to 1 million class-action plaintiffs. Through those numbers, we can see that these consumers will get an average of around $410 each.
That's not bad, as Bloomberg reports that it will amount to as much as 45 cents on the dollar for their claims. But the real winners here were the lawyers. They will reap $123 million in fees, which amounts to 30% of the award. And how many lawyers will this be split among? This isn't clear, but it can't be more than a couple dozen. Even if an implausible large staff of 123 lawyers was involved, the payout would average to $1 million each.