Published reports say the chamber is launching its new, more aggressive legal stand as election day nears in a race that some pundits predict could end with chamber-allied Republicans gaining control of the House of Representatives.

“Litigation is one of our most powerful tools for making sure that federal agencies follow the law and are held accountable,” said Thomas Donohue, the chamber’s president and chief executive.

Reuters reported that two senior Democratic congressional officials said their view was that the chamber was effectively operating as an arm of the Republican Party during the current campaign. But the Democratic officials said they did not want quotes attributed to them for fear of unduly antagonizing the chamber.

The biggest outcry was by the chamber’s traditional critics. The American Assn. of Justice, the umbrella group for the nation’s trial lawyers, roared on its Twitter account that the chamber was engaging in bald hypocrisy by suddenly embracing litigation as its best weapon, immediately after chamber president Donahue complained about lawsuits.

“Hypocrites at chamber now LOVING lawsuits,” the AAJ said on Twitter. “Don’t they always whine about ‘frivolous litigation.’?”

– Eric Bailey

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This particular came in a slapdown Tuesday by U.S. District Judge William Alsup in a class action case by Wells Fargo customers who complained that the bank routinely processed checks and debits from customer accounts based on the largest amount, rather than the chronological order in which the drafts were made. That procedure drew balances below zero faster, and meant more checks and debits would bounce.

For example, if an account had $100 in it and the customer wrote five checks for $20 and one final check for $100, Wells Fargo would process the last check first, draw the balance to zero, then process the other five checks. So instead of one $35 fee, the customer would be charged five $35 fees.

In all, the bank made nearly $1.8 billion in overdraft fees from 2005-2007, the New York Times reported. And the judge was not pleased, as is clear from his ruling:

This action does not challenge the amount of a single overdraft fee (currently $35). That is accepted as a given. Rather, the essence of this case is that Wells Fargo has devised a bookkeeping device to turn what would ordinarily be one overdraft into as many as ten overdrafts, thereby dramatically multiplying the number of fees the bank can extract from a single mistake. The draconian impact of this bookkeeping device has then been exacerbated through closely allied practices specifically “engineered” — as the bank put it — to multiply the adverse impact of this bookkeeping device. These neat tricks generated colossal sums per year in additional overdraft fees, just as the internal bank memos had predicted. The bank went to considerable effort to hide these manipulations while constructing a facade of phony disclosure.

Other lawsuits are pending against Wells Fargo and other banks, though the gravy train will likely stop under recent federal law, the Times says:

Overdraft fees have become an important source of revenue for banks and credit unions in the last decade, particularly as debit cards have risen in popularity.But now, banks stand to lose billions because of new federal laws requiring banks to obtain customers’ permission before allowing many overdrafts to go through. Wells Fargo, for instance, reported that the new regulations would cost it $275 million in the fourth quarter alone, Ms. Messick said. The rules, however, do not prohibit banks from processing transactions from largest to smallest.

No, but the judge has prohibited that practice (pending appeal), in yet another instance in which consumers’ were able to achieve justice through the courts.

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