White v. BMO Bank N.A.

Background

White alleged that BMO authorized electronic transfers exceeding his account balance in December 2020, despite his having opted out of overdraft services. BMO charged two overdraft fees totaling $70, later reversed both fees, and closed the account in January 2021. White further alleged that BMO reported the account closure and negative balance as “UNPAID” to ChexSystems. After White disputed the report in or around October 2024, BMO verified the information as accurate and complete, and ChexSystems later described the dispute as “frivolous and irrelevant.”

White filed this action on September 10, 2025. His complaint asserted claims under the Electronic Fund Transfer Act, the Fair Credit Reporting Act, breach of contract, negligence, and California’s Unfair Competition Law. The court had previously dismissed the negligence claim during statutory screening, based on the economic-loss rule. BMO then moved to dismiss the four remaining claims under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not allege enough facts to state a legally sufficient claim.

Documents Considered

The court incorporated by reference White’s account statements and ChexSystems letters because the complaint referred to them extensively and they were central to the claims. The court concluded that those documents showed $70 in overdraft fees, that the fees were promptly reversed, and that the account was closed because of a negative balance. The court did not rely on the account-disclosure documents in deciding the contract claim, so BMO’s request to incorporate those documents was denied as moot.

Electronic Fund Transfer Act Claim

The court held that the claim was barred by the Act’s one-year limitations period. The alleged overdraft-fee and account events occurred in December 2020 and January 2021, but White did not file suit until September 2025. The court rejected White’s argument for equitable tolling because he did not allege facts showing that he diligently tried to discover the violation but could not do so. The court dismissed this claim with prejudice, finding that amendment would be futile.

Fair Credit Reporting Act Claim

The court found that the Fair Credit Reporting Act claim was timely because BMO’s duty to investigate arose after ChexSystems notified BMO of White’s dispute in or around October 2024. However, the court concluded that White had not adequately alleged that BMO reported inaccurate information or failed to conduct a reasonable investigation. The incorporated documents showed that BMO investigated the dispute and that the reported negative balance was not caused by the overdraft fees, which had been reversed before the account closed. The court granted dismissal of this claim with leave to amend.

Breach of Contract Claim

The court held that the contract claim was untimely under California’s four-year limitations period. White alleged that the breach occurred no later than January 2021, when BMO allegedly disregarded his opt-out election, allowed the account to be overdrawn, charged fees, and closed the account. Because White filed suit in September 2025 and did not allege facts supporting delayed discovery or tolling, the court dismissed the contract claim with prejudice.

Unfair-Competition Claim

The court concluded that the part of the California Unfair Competition Law claim based on the Electronic Fund Transfer Act was untimely. The part based on the Fair Credit Reporting Act was timely, but it failed because the court found no adequately pleaded Fair Credit Reporting Act violation. The court also found that White had not adequately alleged an “unfair” practice under California law. It dismissed the unfair-competition claim without prejudice.

Disposition

The court dismissed White’s Electronic Fund Transfer Act and breach-of-contract claims with prejudice. It granted dismissal of the Fair Credit Reporting Act claim with leave to amend and dismissed the unfair-competition claim without prejudice. White may file an amended complaint within 28 days, but it may reallege only the Fair Credit Reporting Act and unfair-competition claims and may not add new claims or parties.