Oct 17 Bank of America is considering a
plan to introduce a checking account that curbs overdraft
practices, the Wall Street Journal said, citing people familiar
with the bank's strategy.
The bank's plan will not allow customers to overdraw their
balances at an automated teller machine or when making an
automatic bill payment, the Journal said.
The removal of overdraft abilities would be one option
customers could choose under a new checking account program BofA
likely will unveil in the coming months, according to the paper.
It wasn't clear whether BofA is considering boosting fees as
part of its checking account overhaul. Bank executives haven't
made a final decision about the overdraft policy, the newspaper
Bank of America could not immediately be reached for comment
by Reuters outside of regular U.S. business hours.
If the plan goes through, BofA would be the first big bank
to prohibit overdrafts on checking accounts, the Journal said.
BofA's move builds on its decision a few years ago to
prohibit customers from overdrawing their account when using a
debit card to make purchases.
In 2011, under pressure from customers, the bank reversed
course and scrapped plans to charge a $5 per-month debit fee.
Many banks let customers overdraw their accounts in exchange
for fees, typically $25 or $35. Critics say the fees
disproportionately burden lower-income customers and others who
often maintain low account balances.
A few years ago, more than two dozen U.S., Canadian and
European lenders were named as defendants in a class-action suit
accusing them of charging customers with excessive overdraft
Bank of America paid $410 million and JPMorgan Chase
paid $110 million to settle their portions of the nationwide
litigation. Those settlements won final court approval in 2011
and 2012, respectively.