Bank of America to cut overdraft fees from $35 to $10

Amid criticism for overdraft charges throughout the trade, Financial institution of America is relenting.
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Financial institution of America, the second-largest US financial institution, is decreasing overdraft charges from $35 to $10 beginning in Could, the financial institution mentioned in a information launch on Tuesday.

The financial institution can even cease charging inadequate funds charges beginning in February, it mentioned.

The transfer comes amid rising regulatory and congressional scrutiny of such charges. The Client Monetary Safety Bureau (CFPB) mentioned final month that it's taking a look at such charges, which it estimates netted banks $69 billion within the third quarter of 2021, and can situation new steerage aimed toward curbing banks’ reliance on them.

Some banks seem like attempting to get forward of any regulatory intervention. Late final yr, Capital One Monetary mentioned it would cease charging accounts for not having enough funds to cowl drafts, and the most important US financial institution, JPMorgan Chase, mentioned it will give clients extra leeway earlier than charging charges.

JPM, led by CEO Jamie Dimon, mentioned it will give clients a full day to carry overdrawn accounts as much as zero and would permit clients to faucet into funds from direct paycheck deposits as much as two days early earlier than charging them charges.

Many US banks are dealing with Client Monetary Safety Bureau scrutiny over what they cost clients for errors.

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Compared, Financial institution of America will scale back overdraft charges to $10 and is eliminating the switch price clients had been charged for utilizing the financial institution’s overdraft safety service.

The financial institution mentioned these steps, and others it says it took beforehand, will reduce the revenues the financial institution earns from overdraft charges by 97% since 2009.

“We stay dedicated to taking actions that can additional carry down overdraft charges sooner or later and proceed to empower purchasers to drive optimistic modifications to conduct pertaining to overdraft,” Holly O’Neill, president of retail banking at Financial institution of America mentioned within the information launch.