Bank of America is banking on its customers liking its changes this year.
The financial services company announced in a press release on Tuesday it would eliminate nonsufficient funds fees beginning in February and reduce overdraft charges from $35 to $10 in May. Additionally, Bank of America will end its transfer fee associated with its Balance Connect, which allows clients to link accounts to their checking to prevent overdraft.
“Over the last decade, we have made significant changes to our overdraft services and solutions, reducing clients’ reliance on overdraft, and providing resources to help clients manage their deposit accounts and overall finances responsibly,” said Holly O’Neill, president of retail banking for Bank of America.
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Since 2010, when it eliminated overdraft fees for clients using debit cards, Bank of America claims it “significantly reduced the vast majority of fees related to overdraft.” The company stated in its press release the changes it has made since 2010 will reduce its overdraft fee revenues by 97% from 2009 levels.
Some consumers have criticized overdraft fees, arguing they can be predatory. USA Today reported revenue from bank overdraft fees totaled $8.82 billion in 2020.
Bank of America is not the first to lower overdraft fees for its clients. In June 2021, Ally Bank announced it had eliminated overdraft charges and nonsufficient fund fees, with Capital One following suit later that December.
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Bank of America did not respond to a request for comment.
