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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.

$9.9 Billion at Stake

Court documents revealed that U.S. Bancorp’s employee retirement plan reported approximately $9.9 billion in assets under management in 2021, a scale that plaintiffs argue should have given the company powerful leverage to secure lower administrative costs.

While co-lead plaintiff Wesaw withdrew as a representative in October, he remains a member of the certified class, which continues to pursue relief on behalf of all affected participants.

Lawyers on Both Sides

The proposed class is represented by Paul M. Secunda of Walcheske & Luzi LLC and Amy R. Mason of Cummins & Bonestroo.
U.S. Bancorp’s defense team includes Melissa D. Hill, Christopher Diffee, Carolyn M. Corcoran, and Abbey M. Glenn of Morgan Lewis & Bockius LLP, along with Daniel J. Supalla of Nilan Johnson Lewis PA.

Representatives for the bank did not immediately respond to requests for comment, while counsel for the plaintiffs declined to elaborate on the settlement.