Bank of America (BofA), America’s
largest bank by deposits, will scrap overdraft charges on debit
card purchases from the third quarter, ahead of the Federal
Reserve’s new rules that prevent banks from automatically enrolling
customers in overdraft programmes.
More than 60% of all overdraft fees currently
charged by BofA are for debit card transactions.
Go deeper with GlobalData
BofA will only authorise transactions if a
customer has enough money in their account at the time, reducing
the likelihood of a customer becoming overdrawn on their account.
The bank said the change would provide customers with more control
over their finances.
“Our customers have been clear that they want
to know if a purchase is going to overdraw their account,” said
Susan Faulkner, BofA deposits and card product executive.
“Our solution is simple, clear and helps
customers control their finances by reducing the possibility of
over-extending themselves at the point of sale.”
Customers will still have the choice to link
their current account to another account through the overdraft
protection programme to cover overdrawn transactions.
