A Bank of America logo is pictured in the Manhattan neighborhood of New York, New York, the United States, on January 30, 2019. REUTERS / Carlo Allegri

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NEW YORK, Jan.11 (Reuters) – Bank of America (BAC.N), America’s second-largest bank, on Tuesday announced that it would reduce overdraft fees from $ 35 to $ 10 from May, the last bank to have reduced or eliminated such burdens amid increasing regulatory oversight.

Bank of America will also stop charging customers an Insufficient Funds Fee (NSF) of $ 12 for bad checks or other automated overdrafts starting in February, and will waive the fee for the Overdraft Protection service. , the bank said in a press release.

The charges have aroused the wrath of US lawmakers and the scrutiny of the US Consumer Financial Protection Bureau (CFPB). The watchdog said last month it was exploring new directions to reduce banks’ reliance on overdraft fees and insufficient funds which have exploded, generating around $ 69 billion for banks in the third quarter 2021, compared to $ 15 billion for all of 2019, he said.

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Bank of America has not said why it is making the changes, but some banks appear to be trying to get ahead of regulatory intervention

Late last year, Capital One Financial Corp (COF.N) announced it was removing all overdraft and NSF fees.

JPMorgan Chase & Co (JPM.N), America’s largest bank, also said it will give clients a full day to reduce overdraft accounts to zero before billing them and allow clients to dip into funds from direct deposits two days earlier.

Bank of America does not break down income from overdrafts and related fees, but estimated on Tuesday it was 1% of income in 2021. The bank said the changes, associated with others over the past 12 years including stopping debit card overdraft fees at point of sale and providing low cost short term loan coverage – reduce revenue it earns from overdraft fees by 97% from levels 2009.

“We remain committed to taking actions that will further reduce overdraft fees in the future and continue to empower clients to make positive changes in overdraft behavior,” said Holly O’Neill, President of retail banking at Bank of America. Release.

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Reporting by Elizabeth Dilts Marshall; edited by Jonathan Oatis

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