Bank of America says the revenue it gets from overdrafts has dropped 90% from a year ago, after the bank reduced overdraft fees to $10 from $35 and eliminated fees for bounced checks.
The nation’s largest banks are moving away from the practice of charging exorbitant fees on what are mostly small-dollar purchases after years of public pressure. Bank of America CEO Brian Moynihan
Starting the middle of 2021, regional banks such as PNC and Capital One, as well as the online bank Ally, announced plans to eliminate overdraft fees or find ways to curtail them dramatically. Most of the banks said the fees largely impacted the poor and racial minorities, or that the pandemic had shown the banks they could earn big profits without charging fees on their customers, in explaining their decision.
However, Bank of America's decision in January to eliminate non-sufficient fund fees — sometimes referred to as a bounced check fee — as well as cut overdraft fees to $10 is credited with shaking up the industry. BofA for years was cited as one of the top collectors of overdraft fees and still brought in slightly more than $1 billion from such fees last year.
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