Nation's second-largest bank also will stop charging customers when they bounce a check.
Bank of America is slashing the amount it charges customers when they spend more than they have in their accounts and plans to eliminate fees for bounced checks.
It's the latest move by the nation's biggest banks to roll back the overdraft fees they long charged customers, fees that often amount to hundreds of dollars a year for frequent overdraft users.Starting in May, the Charlotte, North Carolina-based bank will cut the overdraft fees it charges customers to $10 from $35. It will also stop charging fees for non-sufficient funds — which are levied when it rejects a transaction — better known as bouncing a check.
Altogether, Bank of America estimates the steps will cut its overdraft-fee revenues by 97% from where they were in 2009, the year before it started taking incremental steps toward reining in overdraft-fee revenues. Originating in banks as a service fee to customers who may not have balanced their checkbook correctly but wanted a bank to honor a purchase, overdraft fees have been transformed by the widespread use of debit cards from a courtesy into a routine source of revenue for banks.
The average fee for overdrawing an account was $33.58, a 22-cent increase over the past two years, according to a Bankrate released in October. Among major U.S. cities, people living in Baltimore, Houston and Philadelphia paid the highest overdraft fees last year at more than $35. Cincinnati, Los Angeles and St. Louis paid the lowest fees at around $31. Sen. Elizabeth Warren, speaking at a
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