Ally Bank scraps overdraft fees for all customers, citing racial impact

Customers at Ally Bank will no longer be charged a $25 overdraft fee no matter what type of account they hold, the company said Wednesday. 

In announcing the new policy, Ally said fees for insufficient funds disproportionately harm low-income households living paycheck to paycheck as well as Black and Hispanic families. Ally, an online bank and unit of publicly held Ally Financial, joins Discover as one of the few banks that no longer charge overdraft fees. Ally is also eliminating overdraft fees to reduce stress on its customers and simplify how their accounts work, said Diane Morais, Ally's consumer and commercial banking president.