Wells Fargo Joins Rivals in Fees Revamp
(Update includes Wells Fargo, additional JPMorgan information)
SAN FRANCISCO (
) --
Wells Fargo
(WFC) - Get Report
became the latest large financial institution to eliminate overdraft fees late on Wednesday.
The San Francisco-based bank is eliminating fees for Wells and Wachovia customers when they overdraw their accounts by $5 or less. Wells will not charge customers more than four overdraft fees per day, the company said.
In addition, customers will be able to opt out of overdraft coverage, meaning customers can specify that they don't want their transactions authorized into overdraft if funds aren't available to cover the transaction, Wells said.
Wells' announcement comes as two of its large bank brethren, Bank of America
(BAC) - Get Report
and
JPMorgan Chase
(JPM) - Get Report
, also announced plans to overhaul the way they collect overdraft fees, caving into the criticism of these practices.
BofA said starting next month it won't charge overdraft fees when a customer's account is overdrawn by less than $10 for one day, changing its mind on moves it made earlier this year. BofA also said it won't charge overdraft fees on more than four items per day. The bank had raised that cap to 10 from five earlier in 2009.
BofA will still impose a $35 fee if an account isn't brought into balance within five days.
Customers also will be allowed to opt out of the overdraft program, meaning purchases won't go through if a customer doesn't have enough money in an account to purchase an item.
JPMorgan Chase plans next year to make overdraft protection opt-in for debit card customers, eliminate fees when accounts are overdrawn by $5 or less, and will reduce the maximum number of fees per day to three from six, among other changes.
The company said earlier Wednesday that it is revamping its policies to "make them clearer and simpler and to give customers more control over their debit cards and the fees they pay," according to a statement.
"We recognize the tremendous growth in our customers' debit-card usage and we're revamping our overdraft policies and posting order to be more consistent with the way they use their accounts today," Charlie Scharf, JPMorgan Chase's head of retail financial services, said in a release.
The Financial Services Roundtable, an industry group, applauded the banks for limiting overdraft fees.
"In these challenging economic times, it is important to help customers maintain a healthy financial future," said Steve Bartlett, the Roundtable's president and CEO, in a statement. "We applaud Bank of America and JPMorgan Chase for leading the industry to serve the consumer in the best manner possible by greatly reducing overdraft fees."
Sen. Charles Schumer of New York, who is pushing legislation to limit overdraft fees, said, "These two institutions are setting a good example, but we need to go the rest of the way so that consumers are able to decide whether they want this overdraft coverage or not."
-- Reported by Joseph Woelfel and Laurie Kulikowski in New York
.
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