Fifth Third Bancorp is the latest bank to announce plans to eliminate fees that retail customers incur when their purchases get declined over a lack of money in their accounts.
The Cincinnati bank will continue to charge overdraft fees of $37, which apply to customers who opt to have their transactions processed despite a lack of available funds.
But Fifth Third is joining other large and regional banks in scrapping nonsufficient-funds fees — a move that the company said is part of a continuing effort to “reduce punitive fees” and “focus on the best outcomes for customers.” The $211 billion-asset bank plans to stop charging the fees on June 23.
“When a customer does not have the funds to cover a transaction or purchase, we don’t want to penalize them further,” Howard Hammond, Fifth Third’s head of consumer banking, said in a press release Thursday.
In recent months, Fifth Third and some of its competitors have added
A few banks, including Bank of America, have also cut their overdraft fees from around $35 to as little as $10.
But with the exception of Citigroup, Ally Financial and Capital One Financial, major banks have largely kept charging overdraft fees. The fees have drawn criticism from both consumer advocacy groups and Biden administration regulators, and on Wednesday a group of Democratic state attorneys general
Large and regional banks have been more open to scrapping nonsufficient fund fees. The
Fifth Third President Tim Spence previewed the decision to eliminate NSF fees during the bank’s January earnings call. He touted options that the company offers to customers who need liquidity.
Fifth Third’s Extra Time tool, which originally launched in 2018 and was made available to more customers last year, gives consumers more time to deposit money into their accounts and avoid overdraft fees. The bank launched a low-fee checking account in 2015, and it allows customers to access their paychecks up to two days early.
