Fox Business, March 16, 2022, Here’s how banking will evolve amid the ‘death’ of overdraft fees, according to J.D. Power
Many top U.S. banks have begun eliminating their overdraft fees on checking and savings accounts, a move that data analytics company J.D. Power says will shift the banking industry toward a more customer-centric strategy.
“Recent moves by Ally, Capital One and Bank of America to abandon or dramatically lower overdraft and other fees are the latest in a series of significant moves retail banks have made to adjust their strategies in line with the evolution of the marketplace,” J.D. Power stated in an article published by the company. “The decision to move from a punitive, carrot-and-stick approach suggests that retail banks are recognizing that the role they play in their customers’ lives needs to evolve beyond service provider and into more of a hub of financial advice and guidance.”
Financial regulators are becoming increasingly critical of overdraft fees, and could end their usage before banks eliminate them individually. In December 2021, the Consumer Financial Protection Bureau (CFPB) conducted a study on overdraft and NSF fees, calling the charges “abusive.” The study stated that banks have become increasingly reliant on overdraft and NSF revenue, which the CFPB said reached an estimated $15.47 billion in 2019.
