JPMorgan Chase, Wells Fargo and Bank of America, according to the CFPB, raked in 44% of the $15.47 billion in overdraft revenue collected in 2019.
The Trend to Cut Overdraft Penalties
Capital One, one of the top 10 banks in the U.S., eliminated overdraft fees in December 2021.
Overdrafts can still occur at Capital One, but customers will not be charged for doing so. Customers can also opt into an overdraft protection program at Capital One and will not be charged for the service.
In summer 2021, online banking giant Ally Bank made headlines for eliminating its overdraft fees, and Alliant Credit Union, another major financial institution, followed shortly after.
Capital One, Bank of America and Wells Fargo are different from Ally and Alliant, however, because of their sheer size.
Capital One is the nation’s sixth largest retail bank and for barely a month it was the only one in the top 10 to eliminate overdraft and non-sufficient funds fees. Then Bank of America and Well Fargo made their announcements.
The elimination of overdraft fees is just one of the banking trends to keep an eye on in 2022.
Banks and Credit Unions That Don’t Charge Overdraft Fees
These eight financial institutions — banks, credit unions and cash management services — do not levy overdraft fees:
*Fidelity’s account is a cash management account, which is slightly different from a traditional checking account and is built for those using Fidelity to invest. Betterment is also a cash management service which offers investing programs and a mobile-first checking account.
**KeyBank’s overdraft protection for its Hassle-Free Account results in a declined transaction. No fees, but also declined payments for things like rent and utilities can still result in late fees for those struggling with finances.
Kent McDill is a veteran journalist who has specialized in personal finance topics since 2013. He is a contributor to The Penny Hoarder. Reporting from Penny Hoarder contributor Timothy Moore is included in this report.
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Source: thepennyhoarder.com