Bank of America and JPMorgan Chase, the US-based banking majors, have taken initial steps to overhaul their debit card programs that have long been attracted criticism across the industry as excessive and harmful to consumers – reported The New York Times.
Reportedly, they have reduced or eliminated fees and are going to allow customers to opt out of overdraft protection. According to the newspaper, Bank of America has said that, from October 19 this year, it will not charge any fees for customers who overdraw their accounts by less than $10 in a single day. The bank will also cap the number of overdraft fees it charges to four a day, although it plans to continue to charge a fee of $35 per overdraft. JP Morgan has said that it will limit the number of overdraft fees it charges a day to three. The bank will stop charging fees when accounts are overdrawn by less than $5.
Bank of America said it has changed its policy because of consumer demand rather than legislative pressure. Brian Moynihan, president of Bank of America’s consumer and small-business banking operations, said: “We made the decision that we had to help customers now and help those most stretched by the economy. They found themselves getting hit by too many fees, and they said, ‘Help us out.’ ”
The Federal Reserve is also contemplating of making it mandatory for banks to get permission from consumers before enrolling them in overdraft programs. Analysts opine that this move by both the banks is likely to put other banks under pressure to pursue similar policies to overhaul their rules, reported the newspaper.
