Bank of America has made several customers very happy by announcing that it is dropping both overdraft fees and bounced checks. They usually charged somewhere between $10 and $35 as overdraft fees, but this will be out, beginning from May 2022. This action came when many customers would end up spending more than they have on their accounts and plans, NBC News reports.
What was the move by BOA
The move by one of the biggest banks in the country to make a choice to roll back the overdraft fees which they have long charged the customers. These fees collected from all the overdraft fees and bounced checks amounted to hundreds of dollars a year, especially for frequent overdrafts and others.
Headquartered in Charlotte, North Carolina, the Bank has changed other customer policies, such as charging non-sufficient funds, often levied on the customer’s account when it rejects a transaction, often known as bouncing checks. Overdraft fees typically happen when a purchase is made on a debit card that exceeds the available cash credit. Adds Boston25 News .
The impact of the change
Since checks are becoming almost obsolete, the bills and other online payments, especially the utility bills, are automated; hence, NSF fees are generated. The second-largest Bank, Bank of America, has said that 25% of the revenue to the institution is through the NSF fee or the overdraft fee.
According to USA Today, the cut from the collection of overdraft fees and bounced checks can bring down the revenues generated right through the years. But the spokesperson from the Bank was optimistic that the other financial solutions they offer to their clients would definitely overcome the reliance on overdraft fees.
The customers and politicians have praised the move because being the largest consumer banking franchise would be a bold move. Now it’s a wait and watch, time to see whether other banks will follow suit.