By Elizabeth Dilts Marshall
NEW YORK (Reuters) – Bank of America, the second-largest U.S. bank, is reducing overdraft fees from $35 to $10 starting in May, the bank said in a news release on Tuesday.
The bank will also stop charging insufficient funds fees starting in February, it said.
The move comes amid growing regulatory and congressional scrutiny of such fees. The U.S. Consumer Financial Protection Bureau (CFPB) said last month https://www.reuters.com/business/capital-one-eliminate-all-overdraft-fees-2021-12-01 that it is looking at such fees, which it estimates netted banks $69 billion in the third quarter of 2021, and will issue new guidance aimed at curbing banks’ reliance on them.
Some banks appear to be trying to get ahead of any regulatory intervention. Late last year, Capital One Financial Corp said it would stop charging accounts for not having sufficient funds to cover drafts, and the largest U.S. bank, JPMorgan Chase & Co, said it would give customers more leeway before charging fees.
JPM said https://www.reuters.com/markets/funds/jpmorgan-chase-reduces-bank-overdraft-fees-bid-customers-2021-12-08 it would give customers a full day to bring overdrawn accounts up to zero and would allow customers to tap into funds from direct paycheck deposits up to two days early before charging them fees.
In comparison, Bank of America will reduce overdraft fees to $10 and is eliminating the transfer fee customers were charged for using the bank’s overdraft protection service.
The bank said these steps, and others it says it took previously, will cut the revenues the bank earns from overdraft fees by 97% since 2009.
“We remain committed to taking actions that will further bring down overdraft fees in the future and continue to empower clients to drive positive changes to behavior pertaining to overdraft,” Holly O’Neill, president of retail banking at Bank of America said in the news release.
(Reporting by Elizabeth Dilts Marshall; editing by Jonathan Oatis)
