Truist recently announced the release of two new bank account products which offer no overdraft fees.
The bank launched Truist One Banking, which will have a checking account and a confidence account, both of which were designed to give consumers more control and address the challenge of overdraft fees, it said in a news release. The accounts also offer easy ways to waive maintenance fees and, for eligible clients, provide a buffer for accidental overspending.
Truist’s checking account offers no overdraft fees, up to a $100 negative balance buffer for qualifying consumers and up to 50% more rewards on select Truist credit cards. Alternatively, the bank’s confidence account, which is an alternative kind of checking account, does not allow users to spend more than what they have in their account.
“Truist One Banking is a purpose-driven approach to banking designed to offer more accessible solutions to all,” Truist Chairman and CEO Bill Rogers said. “We’re committed to inspiring and building better lives and communities by creating financial solutions that enable more clients to build a stronger financial future.”
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Banks begin moving away from overdraft fees
Truist said that earlier this year, it discontinued its fees for returned items, negative account balances and overdraft protection transfers for consumer accounts. These changes, alongside the newly-announced accounts, will save Truist clients an estimated $300 million per year by 2024, the bank said.
Other financial institutions have also begun changing their overdraft fee policies over the past year. Bank of America, Capital One and Citibank are among those that have either eliminated or reduced these fees, and have also implemented balance alerts for credit and debit card transactions to let consumers know when their available balance falls below a certain amount.
The banks that have taken this step have said that eliminating overdraft fees will help increase financial inclusion in underserved communities.
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Regulators look into overdraft fees
The Consumer Financial Protection Bureau (CFPB) has been increasingly looking into non-sufficient funds (NSF) and overdraft fees. The CFPB released a report in December on its investigation of the fees, saying that banks have become increasingly reliant on them and NSF for revenue.
“Unfortunately, switching bank accounts isn’t easy. It involves new account numbers, new debit cards, updating direct deposit, updating auto-debits, and much more,” CFPB Director Rohit Chopra said on a press call in December. “If America can shift to an open banking infrastructure, it will be harder for banks to trap customers into an account for the purpose of fee harvesting.”
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