Banks Respond

In an effort to get out in front of the overdraft legislation discussed in my last blog, several banks have announced new overdraft policies. Banks may be trying to comply with most of the proposed overdraft legislation to keep this area from being governmentally regulated.

Beginning today, October 1, 2009, Bank of America will not charge their customer’s any overdraft fees if the customer’s account is overdrawn less than $10 for one day. The bank will continue to charge a $35 fee if the account is not brought into the positive within five days. Customers will be allowed to opt out of the overdraft program. BofA will charge their customer’s a maximum of four overdraft fees per day. Interestingly enough, BofA had just increased the maximum overdraft fees charged to customers’ accounts from 5 to 10 earlier this year.

Effective first quarter of 2010, JPMorgan Chase will make customers opt-in if they desire overdraft protection. JPMorgan Chase will not charge customers a fee if they are overdrawn $5 or less, and the maximum overdrafts fees charged per day will be decreased from the current cap of 6 to 3.

Effective first quarter of 2010, US Bank will not charge customers any overdraft fees if they are overdrawn $10 or less. Overdraft fees will be limited to 3 a day. New customers will choose to opt-in or opt-out of overdraft privileges. Existing customers will continue to be able to opt-out of overdraft privileges. US Bank will also establish an annual cap on the amount of overdraft fees that can be charged on any single account.

References:

Dale, Steve. “US Bank Restructures Overdraft Policies and Fees.” 24 Sept. 2009. News Release received via internal email.

Woelfel, Joseph. “BofA, JPMorgan to Limit Overdraft Fees,” The New York Times, 23 Sept. 2009.