B of A Settles Class Action Over Trust Accounts

Bank of America Corp. has agreed to a $35-million settlement of a class-action lawsuit Salleging it gouged thousands of trust account holders and then shortchanged them on their refunds. The settlement ends six years of jousting over whether Bank of America should be penalized for alleged financial wrongdoing involving trust accounts--also known as escrow accounts--held by Security Pacific National Bank. Bank of America, now based in Charlotte, N.C., bought Security Pacific in 1992 and inherited its liabilities. The bank did not acknowledge any wrongdoing in the settlement. Company spokeswoman Shirley Norton said the bank decided to settle the case to limit its liability and eliminate a time-consuming legal distraction. About 6,500 trust account beneficiaries are expected to divvy up between $20 million and $25 million after legal fees and other costs, a plaintiffs’ attorney said. The case began in 1994 shortly after Bank of America refunded $42 million in trust account fees and simple interest. Account holders sued the bank, saying they should have been paid compounded interest. That part of the case is still pending.