U.S. Consumers Stand to Save Billions from Banks' Overdraft Reforms

In one of the first efforts to tally the impact of recent overdraft fee reforms, a new analysis finds that changes under way at just five banks could save consumers more than $2 billion annually.

The Pew Charitable Trusts reviewed announcements last month by Bank of America, Wells Fargo, U.S. Bancorp, Truist Financial and Regions Financial to determine how much money each company could forfeit in fees.

Those five banks all unveiled new overdraft programs over the course of nine days in January, which Pew called “a watershed month for boosting consumer protections” in the banking industry.

The sweeping changes come as large and midsize banks face pressure from both regulators and competitors to reduce their reliance on overdraft fees.

Some banks are eliminating fees charged when overdrawn customers attempt unsuccessfully to make a purchase, as well as fees charged when a negative balance gets covered by a transfer from a linked account. Some banks are giving customers longer grace periods before charging fees or limiting the number of fees that customers can incur each day. In a couple of cases, banks are ditching overdraft fees entirely.