Bank of America to slash overdraft fees amid pressure from consumer advocacy groups

Bank of America joins other financial institutions in slashing pesky overdraft fees, which advocates say disproportionately impact the poor.

Bank of America announced Tuesday that it will slash overdraft fees -- the fines consumers pay when they make a purchase with their debit card but don't have enough money in their account -- from $35 to $10 starting this May.

The changes come in the wake of pressure from consumer advocacy groups that say these fees disproportionately impact vulnerable and low-income Americans.

A report released last month by the Consumer Finance Protection Bureau found that overdraft and non-sufficient funds fees remain lucrative for banks, reaching an estimated $15.5 billion in 2019. The CFPB also said fewer than 9% of consumer accounts pay 10 or more overdrafts per year, accounting for close to 80% of all overdraft revenue.

Moreover, despite a drop in fees collected, the CFPB said "many of the fee harvesting practices persisted during the COVID-19 pandemic."