Bank of America to cut overdraft fees from $35 to $10

5

Bank of America, the second-largest US financial institution, is lowering overdraft fees from $35 to $10 beginning in May, the financial institution stated in a information launch on Tuesday.

The financial institution may also cease charging inadequate funds fees beginning in February, it stated.

The transfer comes amid rising regulatory and congressional scrutiny of such fees. The Consumer Financial Protection Bureau (CFPB) stated final month that it’s taking a look at such fees, which it estimates netted banks $69 billion within the third quarter of 2021, and can difficulty new steerage geared toward curbing banks’ reliance on them.

Some banks seem to be attempting to get forward of any regulatory intervention. Late final 12 months, Capital One Financial stated it could cease charging accounts for not having enough funds to cowl drafts, and the most important US financial institution, JPMorgan Chase, stated it could give clients extra leeway earlier than charging fees.

JPM, led by CEO Jamie Dimon, stated it could give clients a full day to deliver overdrawn accounts up to zero and would enable clients to faucet into funds from direct paycheck deposits up to two days early earlier than charging them fees.

Bank of America Sign
Many US banks are dealing with Consumer Financial Protection Bureau scrutiny over what they cost clients for errors.
Getty Images

In comparability, Bank of America will cut back overdraft fees to $10 and is eliminating the switch charge clients have been charged for utilizing the financial institution’s overdraft safety service.

The financial institution stated these steps, and others it says it took beforehand, will cut the revenues the financial institution 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 stated within the information launch. 

Comments are closed.