Bank of America announced last week that the nation's second-largest bank will eliminate non-sufficient fund (NSF) fees in February and reduce overdraft fees from $35 to $10 in May.
In addition, Bank of America clients will no longer be able to overdraw from ATMs beginning in February, and the transfer fee associated with Bank of America's Balance Connect service is also being removed come May.
Bank of America said in its press release that, once these changes take effect, and combined with efforts beginning in 2010, overdraft revenue will be 97% lower than what it was in 2009. "We've been on this journey for ten years to really be more transparent, developing more relationship-driven approaches opposed to a fee driven approach, transaction-driven approach," Don Vecchiarello, Senior Vice President and Media Relations Executive at Bank of America, said in a phone interview.
Vecchiarello went on to say the company was committed to making positive changes in the overdraft and financial literacy space. "We're going to continue to lead the way for the industry on this journey, and while we've already made numerous substantial changes, we remain committed to taking actions that will empower clients to drive positive changes in behavior pertaining to overdraft," he said.
Bank of America first began reducing fees back in 2010 by eliminating overdraft fees for clients using debit cards at the point of sale, creating the SafeBalance account that cannot be overdrawn from and by sending out low-balance alerts, among other things. "We continue to promote financial literacy through Better Money Habits and other educational resources to help our clients build sound financial habits," Vecchiarello said regarding their educational website in partnership with Khan Academy.
Wells Fargo and Citi are two more large financial institutions that recently reduced or eliminated overdraft fees, but it remains to be seen if other banks will follow suit. Vecchiarello said Bank of America will "continue to make changes and take actions that are going to empower our clients to really drive positive change, whether it's overdraft, or financial literacy or financial responsibility, just encourage different, more sustainable, behaviors for long-term financial wellness for our clients."