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The majority of U.S. Bancorp customers have found ways to avoid paying monthly fees, after the bank phased out its "free" checking accounts, an executive told American Banker.
March 14 -
The Consumer Financial Protection Bureau's announcement Wednesday that it was targeting overdraft protection practices was a stark reminder for bankers that even if they have already made significant changes, it is likely not enough, observers warned.
February 22
U.S. Bancorp (USB) is raising some of its overdraft fees to $35 per transaction, in the latest example of banks changing the ways that they charge checking account customers.
The Minneapolis bank will start charging customers $35 for overdraft protection on transactions of more than $15 starting June 29, a company spokeswoman said on Wednesday. It currently charges customers $33 for overdrafts on transactions of more than $20.
U.S. Bank will also raise its prices for overdrafts on smaller transactions, to $15 for charges of $15 or less, from the current overdraft prices of $10 for charges of $20 or less.
The price changes are "part of an overall review of our deposit fees," spokeswoman Teri Charest said in an email Wednesday. "While there's nothing inherently special about the dollar threshold, our goal is to continue to ensure that the fee is relative to the size of the overdraft, so that our customers never experience the proverbial '$35 cup of coffee.'"
Later this year, U.S. Bank is also planning to eliminate some of its checking account fees, including charges for closing an account early, and will reduce its stop-payment fees, Charest said.
Its overdraft changes are the latest attempt by large banks to adjust to new regulations capping overdraft and debit card interchange fees. Many of U.S. Bank's competitors have
U.S. Bank revamped its checking account fees last summer, eliminating free checking but allowing customers to avoid the monthly fees if they use direct deposit or keep a minimum balance. An executive told American Banker in March that the
Banks are also bracing as the Consumer Financial Protection Bureau
"For the next six months there will be more changes by the mega-banks to influence the CFPB's overdraft regulations," says Mike Moebs of research firm and consultancy Moebs Services.
Despite its newest price changes, U.S. Bank's tiered overdraft fee structure and its policy of waiving a fee if a customer overdraws an account by less than $10 are "steps in the right direction," Moebs says, estimating that those policies have likely cut at least 10% from the bank's overdraft revenue.
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