Wells Fargo & Co and Bank of America will no be charging customers for bouncing checks. They are also implementing new rules to curb overdraft charges. These are the latest lenders to change these charges amid increasing regulatory examination.
Bank of America, the second-largest U.S. bank, said earlier on Tuesday that it will reduce the cost it charges its customers who make overdrafts on their accounts by $10 instead of $35 beginning in May.
Both banks announced they would not charge customers a $35 not-sufficient-funds (NSF) fee to bounce checks or for making other automated payments. In addition, they will remove the 12 cents fees that were previously imposed for customers who used Overdraft Protection Services.
These fees have attracted the attention from U.S. lawmakers and the oversight by officials at the U.S. Consumer Financial Protection Bureau (CFPB). The watchdog revealed that it was looking into new guidelines aimed at reducing the use of overdraft and NSF fees. These have risen, creating the equivalent of $69 billion for banks during 2019’s third quarter, compared to $15 billion in the entirety of 2019.
Bank of America has been engaged in discussions with the CFPB about the new policy that it has received “in an encouraging manner”.
CEO of Wells Fargo’s Consumer and Small Business Banking CEO Mary Mack said in an interview that the bank had taken the decision after reviewing the data on customer spending.
In addition to removing certain charges, Wells will give customers who are unable to pay their bills for an extra 24 hours to bring their account balance to zero before charging them with a fee of $35 in addition to offering customers who are receiving direct deposit access to those funds for up to the two-day mark earlier than the current standard practice.
These changes follow similar ones that were made in the last quarter of 2013 in which Capital One Financial Corp said it would eliminate all fees for overdrafts and NSF charges, and JPMorgan Chase & Co said it would allow customers more freedom when they need to make overdrafts, before charging fees.
Bob is a Digital Entrepreneur and keen follower of the Crypto and Blockchain world. He enjoys exploring the latest technology and news related to Fintech world. He is a go-to person with a positive attitude towards life.