Both Bank of America (Charlotte) and J.P. Morgan Chase (New York) will be reducing the overdraft fees on customer accounts.According to The Wall Street Journal, the changes include no fees at BofA if customers overdraw their account by less than $10 in one day, and no fees for J.P. Morgan customers if their account is overdrawn by $5 or less.
The Journal said the banks were likely motivated by pending legislation due to be proposed by Sen. Chris Dodd (D-CT) that would require banks to receive permission from customers before enrolling them in overdraft programs. If the Dodd bill is approved, there could be consequences in terms banks losing fee revenue from this service.
The entire story can be found here.
The move by the two banking giants comes on the heels of BofA's introduction of a simplified credit card-BankAmericard Basic Visa card. The new card features one basic rate for all types of transactions, including balance transfers and cash advances. That rate is tied to the U.S. Prime Rate and will not change over the life of the account.
It's obvious that banks are trying to change consumer perception after a continual lashing by Congress and the public. The Journal expects other banks to follow suit in the overdraft area. And I think it's likely we'll see some card issuers introduce new types of credit cards similar to what BofA is doing. Situations like these-certainly the credit card example-have a way of illustrating that it is possible for banks to innovate while meeting new regulatory requirements. I guess it's a case of being given lemons and making lemonade out of them.