Bank of America Slashes Bounced Check and Overdraft Fees
Bank of America is eliminating fees for insufficient funds and cutting overdraft fees from $35 to $10, the bank announced in a press release on Jan. 11. The bounced check fee is set to end next month and the overdraft fee reduction will begin in May, a move hailed by many financial experts.
The bank said that these changes will lead to overdraft fees being reduced by 97% from 2009 levels.
“Over the last decade, we have made significant changes to our overdraft services and solutions, reducing clients’ reliance on overdraft, and providing resources to help clients manage their deposit accounts and overall finances responsibly,” said Holly O’Neill, president of retail banking for Bank of America, in the release. “These latest steps will further support our clients and empower them to create long-term financial wellness.”
Overdraft fees have been a large source of revenue for big banks, although the practice is controversial. Regulators have stated that the nation’s poorest often end up paying the most.
According to the Consumer Financial Protection Bureau, banks made nearly $15.5 billion in overdraft fees in 2019 — and 40% of the fees generated by big banks were brought in by JPMorgan Chase, Bank of America and Wells Fargo, CNN added.
However, JPMorgan Chase told CNN Business in December that it has taken some actions on overdraft charges and non-sufficient funds fees.
Without the additional revenue from overdraft fees, banks still fare well. CNN reported that financial stocks have skyrocketed so far this year because of rising long-term bond yields, which help make lending money more profitable for banks.
More From GOBankingRates