Ally Bank, a digital lender in the US, has put an end to overdraft fees on all accounts.
The decision is expected to provide relief to all Ally Bank customers as the Ally Financial-division did not place any restriction or requirement to avail the benefit.
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The overdraft fees are charged when a consumer draws more money than they have in their account.
It is regarded as a key revenue source of the banks. However, according to the bank, the removal will mitigate the burden on consumers who are disproportionately hurt by overdrafts.
Ally Financial CEO Jeffrey Brown said: “This is a significant advancement for consumers as we live out our mission and live up to our name – being a true ally. Overdraft fees are a pain point for many consumers but are particularly onerous for some. It is time to end them.
“Nationwide, more than 80% of overdraft fees are paid by consumers living paycheck to paycheck or with consistently low balances – precisely the people who need help stabilizing their finances. Eliminating these fees helps keep people from falling further behind and feeling penalised as they catch up.”
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By GlobalDataAlly Bank consumer and commercial banking president Diane Morais said: “Since we launched Ally in 2009, we’ve worked tirelessly to create simple experiences that are built around consumer needs.
“We know that money can be a source of stress and confusion, and we try to simplify that for people. Overdraft fees can be a major cause of anxiety. It became clear to us that the best way to relieve that anxiety was to eliminate those fees.”
