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Wells, Chase, B of A cut back on debit overdraft fees
September 24, 2009
The Philadelphia Inquirer reports that pressure from lawmakers pushed three top U.S. banks to cut back on the overdraft fees they collect when their customers debit cards for purchases that exceed their account balances.
According to Moebs Services, an economic-research firm, overdraft fees would have accounted for nearly $40 billion to U.S. bank revenue this year.
But Wells Fargo & Co. said this week that it planned to drop fees for customers who overdraw their accounts by $5 or less and would allow customers to opt out of overdraft coverage. Bank of America Corp. and JPMorgan Chase & Co. made similar announcements.
Barbara Nate, a spokeswoman for Wachovia Bank, now owned by Wells, says Wachovia already had an overdraft-opt-out option for debit card transactions. So do Citizens Bank and TD Bank N.A., according to bank spokespeople.
Lawmakers have proposed restricting overdraft fees, especially those connected with debit and ATM transactions.
But B of A spokesman T.J. Crawford says banks are making the changes to improve customer service, not because of pressure from Capitol Hill:
These enhancements are part of a larger effort to provide customers with more choices, especially in challenging economic times.
Ed Mierzwinski of U.S. PIRG, an advocate for the public interest who is skeptical of banks trying that tout improvements to customer service as the catalysts for overdraft changes, did praise Chase for making overdraft coverage a customer choice and for the bank's plan to post ATM and debit transactions chronologically rather than by size.
Trends / StatisticsTransaction ProcessingRegulation / LegislationDebit / CreditNorth AmericaBank / Credit Union
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