In the last week alone, three big banks joined the rush by other major players in announcing they will curtail or eliminate some of the fees charged to customers for overdrawing their accounts:
U.S. Bank, the country’s fifth-largest bank by assets, said it would boost from $5 to $50 the amount it lets customers overdraft before charging fees, and also provide a one-day grace period to avoid overdraft fees. That comes on the heels of the bank eliminating certain non-sufficient fund (NSF, or bounced check) fees earlier this month. Truist, the sixth-largest bank, said it will launch two types of personal checking accounts with no overdraft fees this summer, and will eliminate certain other fees for all its customers with existing personal accounts.Regions Bank, No. 24 among the big banks, said it will do away with NSF fees along with the fees it charges to transfer money between accounts to cover overdrafts, starting in the first quarter of 2022.
Overdraft and NSF fees, often around $35 apiece, kick in when customers attempt a transaction that amounts to more than what they have in their account. Overdraft fees generally apply when the bank lets the transaction go through anyway, while NSF fees apply when it doesn’t. Government financial regulators have frowned on such fees recently, noting that they fall hardest on people with lower incomes. Over the last two months, the nation’s three largest banks also announced plans to cut back on their overdraft and bounced check fees:
Earlier in January, No. 2 Bank of America said it would trim its overdraft fees from $35 to $10 and eliminate NSF fees along with fees for a program that lets customers automatically transfer money from one account to another to cover overdrafts. Wells Fargo, the third-largest bank, said the same day that it would ease up on fees by eliminating NSF fees and transfer fees, and give customers a one-day grace period to avoid overdraft fees. Chase, the nation’s largest bank, said in December that it would add a one-day grace period to avoid overdraft fees and also provide customers earlier access to money they get via direct deposit. Earlier in 2021, the bank expanded its overdraft cushion to $50 and eliminated fees for bouncing checks or electronic payments.
Many of the changes came after the Consumer Financial Protection Bureau said the agency would be scrutinizing banks that relied heavily on overdraft fees. Capital One and Ally were frontrunners in the trend, announcing last year that they were backing off overdraft fees permanently. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.
