Bank of America and JPMorgan Chase has announced that they will both be adjusting the way their debit card programs handle overdraft fees by allowing the opting out of overdraft protection and adjusting how charges are credited.
News of the adjustments will likely be welcomed by those looking to consolidate debt that may have been caused by paying steep fees when their accounts have been overdrawn.
Beginning October 19, Bank of America will cease charging overdraft fees for customers who overdraw their account by less than $10, impose a limit of four overdraft fees per day and allow customer to opt out of overdraft protection and not allow any charges to go on the card once it reaches its balance.
“We made the decision that we had to help customers now and help those most stretched by the economy,” Brian Moynihan, the president of Bank of America’s consumer and small-business banking operations, told the New York Times.
Chase will impose similar changes, not charging fees for accounts overdrawn by less than five dollars and capping the amount of fees per day at three. By the end of Q1 2010 the bank will also stop lumping transactions for one day together and processing the highest charges first.
Upon hearing of the changes made by the banks, House Financial Services Committee Chairman Barney Frank of Massachusetts was pleased with the move and hoped that change would confirm to other banks that “it’s doable.”
“No one else will be able to argue that it’s too burdensome,” he added, according to the Wall Street Journal.