In a case that has gripped both Wall Street and Main Street, U.S. Bancorp and a group of nearly 93,000 current and former employees have reached a settlement in principle to end a class action accusing the banking giant of overcharging its 401(k) participants with excessive recordkeeping fees — a potential violation of federal benefits law.
The deal, filed Monday in Minnesota federal court, follows more than three months of intense, arm’s-length negotiations between the parties, according to a joint status report that also requested a temporary stay in case deadlines. The terms of the agreement have not yet been disclosed.
Class Certified After Legal Back-and-Forth
The settlement marks the latest chapter in a legal saga that began in January 2023, when plan participants Ana Dionicio and Alejandro Wesaw accused U.S. Bank and its benefits administration committee of failing to use the company’s immense plan size to negotiate lower fees, costing workers millions.
In March 2024, U.S. Bancorp — the parent company of U.S. Bank — stipulated to class certification, encompassing tens of thousands of employees. That same month, U.S. District Judge Patrick J. Schiltz partially denied the bank’s motion to dismiss, ruling that the plaintiffs plausibly alleged the plan’s recordkeeping fees were inflated compared to similar plans.
The judge agreed that recordkeeping services were largely “fungible commodities” among large 401(k) plans, dismissing the bank’s argument that service variations made comparisons invalid. Later that year, the bank’s attempt to appeal that ruling was rejected, further cementing the class’s legal standing.
