Dykstra said website classaction.org is also fishing for plaintiffs. "Unfair Overdraft Protection Fees" are listed on the site under the Consumer Fraud Class Action heading.

"Many of the country's largest banks, including Bank of America, Citibank and Wachovia, are allegedly subjecting their customers to unfair and deceptive overdraft protection charges," the website says. "We are investigating to determine whether smaller, regional banks are also engaging in similar practices."

CU*Answers CEO Randy Karnes said the lawsuits may seem as if they intend to protect consumers, but at their core they are about playing the system.

Such lawsuits do little to help those who overdraft their accounts, but are helpful to lawyers in search of paper work settlements, he said.

Dykstra said attorneys bringing the suits against credit unions are purposely listing volunteers as defendants to scare them into settling without getting as far as the discovery phase.

How can a credit union protect itself from a similar suit? Industry consultant Marvin Umholtz said that, unfortunately, a credit union doesn't have to be guilty of abusive behaviors to be subjected to lawyers' attempts to shake down the financial community for settlements.

However, Dykstra said she sent an email to member credit unions shortly after she learned about the Xceed lawsuit, encouraging CEOs to review current overdraft policies and procedures to make sure they are aware of how transactions are being processed.

"Make sure you know what you're doing, and that it's in the best interest of members," she said. At the CEO level, many may not know exactly how overdrafts are being sorted, charged or paid, she added.

Back when overdrafts were first introduced, Dykstra said the prevailing opinion at the time was that it was more member-friendly to process items from large amounts to small, with the idea that larger items would be more important.

Karnes echoed that idea, saying credit unions should be mindful that times have changed, and what was once seen as a member friendly tactic is now suspect. Every credit union should be aware of those who seek to exploit overdrafts and work to validate their processing practices against today's network standards.

"What was once helping a member clear their largest and potentially most embarrassing NSF-type transactions first, now is suspect by those who believe that the member has no responsibility in actually spending only the money they have in their account," he said.

Dykstra said California credit unions targeted by the suits tell her they don't intend to settle.

"No one is willing to pay to make it go away, it's a matter of principle," she said. "They didn't do anything wrong and they are going to fight it."