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January 13, 2022

BofA and Wells Fargo reduce overdraft fees

Wells Fargo and Bank of America are working on plans to slash overdraft-related fees and will also stop charging fees for bouncing cheques, Reuters has reported.

Earlier this week, US banking major Bank of America announced plans to lower overdraft account charges from $35 to $10 from May 2022.

Besides, the two lenders have decided to eliminate a $35 non-sufficient funds (NSF) fee for automated payments and bouncing cheques.

They also plan to do away with nearly $12 fees for offering overdraft protection services.

In doing so, they join other lenders such as Capital One Financial and JPMorgan Chase, who made similar changes to ease     regulatory pressure.

Last month, the US Consumer Financial Protection Bureau (CFPB) revealed that it was working on a plan to curb lenders’ reliance on overdraft and NSF fees.

As per the report, such charges generated approximately $69bn for the banks in the third quarter of 2021, which was just $15bn during entire 2019.

Bank of America retail banking president said in an interview that the bank was working alongside CFPB on the new policy and has welcomed the move.

Some lenders have scrapped overdraft fees entirely but Bank of America has decided against it because “eliminating overdraft altogether is not really what clients want,” O’Neill said citing the bank’s conversations with community advisory groups.

Wells Fargo consumer and small business banking CEO Mary Mack stated that the decision was made after studying customer spending data.

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