Banks Change Overdraft Policies Amid Competition, Regulatory Pressure
Pressure from regulators and lawmakers and a need to stay competitive has pushed many banks to make changes to their overdraft practices in the past year.
In June, the Consumer Financial Protection Bureau said it is examining overdraft fee practices at more than 20 unnamed banks to identify companies for "further examination and review." The agency launched an initiative this year that seeks to reduce what it called "exploitative junk fees" charged by banks and financial companies.
The New York State Department of Financial Services, in guidance released July 12, urged lenders in the state to limit overdraft fees on consumer accounts.
Since June 2021, at least 31 banks have announced eliminations of overdraft charges, reduced fee amounts or relaxed rules related to them.
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