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

Bank of America, the second-largest US 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 Consumer Financial Protection Bureau (CFPB) said last month 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 said it would stop charging accounts for not having sufficient funds to cover drafts, and the largest US bank, JPMorgan Chase, said it would give customers more leeway before charging fees.

JPM, led by CEO Jamie Dimon, said 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.

Bank of America Sign — Many US banks are facing Consumer Financial Protection Bureau scrutiny over what they charge customers for mistakes.

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.

Per: NYP