When it comes to pesky overdraft charges, most leading banks seem determined to do everything they can to help customers -- except actually help them avoid the fees.
Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co. and U.S. Bank announced changes to their overdraft rules last week that each says will be a boon to customers, including limits on how often and under what circumstances fees will be charged.
The changes come as lawmakers consider legislation that would crack down on what some see as dubious practices, including signing up customers for overdraft protection without first asking permission and covering overdrawn payments in ways that ensure the most charges.
It's estimated that overdraft fees will total at least $38 billion this year, more than double what banks pocketed from such charges a decade ago.
"It's a tremendously lucrative business," said Sally Greenberg, executive director of the National Consumers League, an advocacy group. "The banks make it far too easy for people to get trapped in these fees."
Clearly the big banks know they've been pushing it -- why else would they move in lock step to change their ways? But most won't admit it's the threat of legislative action that's making them sing a different tune.
Anne Pace, a BofA spokeswoman, told me the company was merely being responsive to its customers.
"We've been hearing more and more from customers, given the economic climate, that they're looking for help," she said. "We've been very emphatic about that. It's about our customers."
Steve Dale, a U.S. Bank spokesman, said pretty much the same.
"We try to give our customers the highest level of satisfaction," he said. "We simply decided that now is the time to look at our service charges."
Sure.
Beginning Oct. 19, BofA said, it will no longer charge its usual $35 overdraft fee if a customer's account is overdrawn by less than $10 in a single day. It will also limit the number of overdraft fees it charges to four a day, rather than the current 10.
Beginning in the first quarter of next year, U.S. Bank will also waive fees if an account is overdrawn by less than $10 and will limit the number of overdraft charges to three a day.
Wells and Chase will stop charging fees if an account is overdrawn by less than $5. Wells will limit its overdraft fees to four a day, while Chase will stop at three. All subsequent transactions for each bank will be denied.
