Bank of America Touts Leadership on Overdraft Change

Monday, 12 July 2010 | by Pat's Picks

Common sense should be rewarded. So I draw your attention to a sensible ad in the New York Times today. Bank of America bought a full-page ad to tout its new policy on debit card overdrafts.

Prompted by a tough new federal regulation on outrageously high overdraft fees, many banks have been pressuring customers to opt-in so that the huge fees can continue. B of A has taken the opposite approach. If there’s not enough money in your account the debit card purchase will just be rejected. This is meant to end, for once and all, the possibility that you’ll get stuck paying $40 for a sandwich just because it happened to put you a couple of dollars past the balance in your bank account.

I’ve been burned by this before, with fee upon fee just because I didn’t notice that an account needed to be topped up. I have no objection to overdraft protection, but these debit card fees typically weren’t just a short-term loan. They were a pricey penalty for a simple mistake.

Bank of America (and some others who are also taking this approach) will miss out on big fee revenue by doing this. But it’s the right thing for customers.

An Associated Press story on the topic

Bank of America Overdraft Control