Bank of America ends bounced check fee, slashes overdraft fine
Bank of America clients will no longer face a fee for bouncing a check, starting next month, and will pay only a $10 fine instead of $35 if they overdraft an account, beginning in May, the financial institution announced Tuesday.
Why it matters: Bank of America is the latest major bank to reconsider its penalty system, as the industry as a whole has faced mounting pressure from lawmakers for the practice of charging such fines.
- In the past, financial institutions have raked in millions of dollars from such fees, and people who can least afford them can wind up paying more in overdraft fees than the amount that overdrew the account.
What they're saying: "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," Holly O'Neill, Bank of America's president of retail banking, said in a statement.
The big picture: Ally Bank did away with its $25 overdraft fees entirely in June last year, and Capitol One did the same in December.
Editor's note: This article has been corrected to reflect that the change in overdraft fees begins in May (not February).