Bank of America is considering a new type of checking account that would prohibit customers from overdrafting at automated teller machines or through automatic bill payments.
The new account would be the latest move by the Charlotte bank to pull back from a practice that allows customers to spend more money than they have in their accounts – in exchange for lucrative fees for banks.
The Wall Street Journal first reported the proposal Thursday. Bank of America declined to comment on the account Friday.
If the bank moves ahead with the plan, it’s unclear when it might offer the account. Presumably, the accounts would be designed for customers who don’t ever want to be charged overdraft fees. The bank’s standard overdraft fee is $35.
The change is not expected to affect Bank of America’s existing checking accounts, which would continue to allow overdrafts.
Regulators have cast a critical eye on overdrafts over the past few years, and a federal rule change that took effect in 2010 required bank customers to actively opt-in for overdraft protection. Bank of America took things a step further than its peers, ending the ability to overdraft using a debit card. That decision was estimated to cost the bank $1 billion in annual revenue.
Bank of America is the second-largest bank in the United States.
Dunn: 704-358-5235; Twitter: @andrew_dunn
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