Overdraft fees: Holding the moral high ground
As many suspected, credit unions’ overdraft protection fees are roughly half of banks’ rates.
An early financial services trend of 2022 involves big banks announcing plans to eliminate or dramatically reduce overdraft fees.
Capital One kicked off the process in December, with Bank of America and Wells Fargo quickly following suit—each of the three putting its own spin on the ball.
These fees have long been a sore point with consumers, are attracting increasing regulatory scrutiny, and have been shown to disproportionately impact a small segment of (presumably lower-income) consumers.
A December Consumer Financial Protection Bureau (CFPB) report found that 9% of consumer accounts pay 80% of these fees. Therefore, it’s no surprise the announced changes received widespread media coverage and kudos from some consumer advocacy groups.
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