U.S. Bank redrafts overdraft policies

U.S. Bank has redrafted its overdraft policies, now offering a reduced fee of $10 for transactions of $20 or less drawn on negative balance accounts. The change takes effect in August, according to a release from the bank.

"U.S. Bank is committed to doing what's right for the customer. We began implementing changes last fall based on what we heard from customers, all of which were centered on giving them the power to choose what's right for them," said Richard Davis, chairman, president and CEO of U.S. Bancorp. "This approach is very consistent with how we approach our customer relationships. Customer service is part of who we are, and we are confident this policy will increase customer satisfaction."

The new overdraft policy is part of the on-going review of deposit product offerings that U.S. Bank began last year and that is expected to continue as the industry landscape is recast.

In September, prior to proposed regulatory changes, U.S. Bank announced measures to curb the impact of overdraft fees, including capping the number of overdraft fees to three in one day, waiving fees if the account is overdrawn less than $10 and expanding same-day availability for most deposited items.

This summer, customers will have the power to choose whether they want their bank to decline transactions made with their debit cards or at the ATM if their account is overdrawn or if the transaction would create a negative account balance.

Now, in addition to the changes already in effect, U.S. Bank customers who make a transaction on an account that is overdrawn (including checks, automatic withdrawals, ATM and check card transactions), will see a reduced fee of $10 for transactions $20 or less, but $33 for anything over $20. U.S. Bank says the $10 price point is far lower than any other major bank in the industry.

U.S. Bank provides customers with multiple ways to avoid overdrafts, including its set of overdraft protection options, such as linking another deposit account, credit line or credit card to the checking account to cover overdrafts when they happen. U.S. Bank also encourages customers to use the free text or email alerts that it offers to better monitor account balances and to know when certain size transactions move through their accounts.

"Our research indicates that clients want the power to choose how their overdraft debits are handled. We know that some would rather that we reject their overdraft debits, and we will give them that option. But we also know some clients want different choices, which is why our approach is to present all options clearly and let them choose the path that serves them best," Davis said.