Bank of America slashes fees for account overdrafts
BNN Bloomberg
Bank of America is slashing the amount it charges customers when they spend more than they have in their accounts and plans to eliminate entirely its fees for bounced checks.
NEW YORK-- Bank of America is slashing the amount it charges customers when they spend more than they have in their accounts and plans to eliminate entirely its fees for bounced checks.
It's the latest move by the nation's biggest banks to roll back the overdraft fees they long charged customers, fees that often amount to hundreds of dollars a year for frequent overdraft users.
The bank based in Charlotte, North Carolina, will cut the overdraft fees it charges customers to US$10 from US$35 starting in May. It will also stop charging fees for non-sufficient funds -- which are levied when it rejects a transaction -- better known as bouncing a check.
While checks are no longer widely used, NSF fees can come from automated payments like utility bills. Bank of America, the nation's second-largest bank, says roughly 25 per cent of its overdraft/NSF fee revenue each year came from NSF fees.
Altogether, Bank of America estimates the steps will cut its overdraft-fee revenues by 97 per cent from where they were in 2009, the year before it started taking incremental steps toward reining in overdraft-fee revenues.
"This is the final step in the journey we've been on," said Holly O'Neill, president of retail banking at BofA, in an interview. "We have good financial solutions for clients without them having to rely on overdraft, but we will still have overdraft if it is needed."
