Best v. United States National Bank
Supreme Court of Oregon
739 P.2d 554 (1987)
United States National Bank (USNB) (defendant) charged customers a fee for nonsufficient-funds (NSF) checks, raising it from $3 to $5 over several years. The Bests (plaintiffs) sued individually and as class representatives, claiming the fee far exceeded USNB's actual cost of processing NSF checks, that the bank exercised its fee-setting discretion in bad faith, and that the fee was unconscionable. The circuit court granted summary judgment to the bank on all claims; the court of appeals reversed on the good-faith claim but affirmed on the rest, and the Bests appealed further.
Whether a bank's decision to set an undisclosed, above-cost nonsufficient-funds fee violates the reasonable contractual expectations of its depositors and thus breaches the covenant of good faith.