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SALT LAKE CITY -- Bank of America and JPMorgan Chase say they're ready to make some changes in overdraft fees and practices that have been called excessive and harmful to consumers.
"There are always too many fees, right. They're always shafting me," Landon Faulkner said.
The announcements come as lawmakers prepare to implement sweeping credit card reforms, and amid long-standing public outcry against the fees.
"They charge for everything," Scott Archbold said, while acknowledging it is an option to comparison shop for banks.
Recent reports have heightened the overdraft fee scrutiny, finding the banking industry is pocketing billions of dollars a year in fees.
Still, Utah Bankers Association President Howard Headlee says he doesn't understand the overdraft ire.
"When you write a check or make a payment that you cannot cover, it's a bad situation," Headlee told KSL Newsradio. "You're going to pay fees somewhere."
Headlee doesn't know if the trend will extend to other banks, although he sees the logic in these two banks' decision.
"There are a lot more debit card transactions right now, so I'm sure this is, mostly in part, a response to the marketplace that a lot more people are using their debit cards -- and in that regard, maybe getting into trouble faster," Headlee said. "This is a good adjustment."
Bank of America says it's capping the fees charged to customers who overdraw from their accounts. Starting Oct. 19, the bank will no longer charge overdraft fees when a customer's account is overdrawn by less than $10 in one day. A $35 fee will still be levied if the account isn't brought into balance within five days.
The move backpedals on hikes the company had imposed just a few months ago.
The bank also plans to limit to four the number of times an overdraft fee can be charged on an account per day. Just this year, the bank had raised that cap from five to 10.
For its part, JPMorgan Chase will make overdraft protection opt-in for all customers, post transactions to accounts as they occur and eliminate fees when accounts are overdrawn by $5 or less. It will also reduce the maximum number of fees per day to three from six.
Those changes will start in the first quarter of 2010.
Story compiled with contributions from Andrew Adams and The Associated Press.
