Huntington Bancshares announced several moves Tuesday that are designed to help struggling consumers, including the decision to slash the price of an overdraft fee by about 60%.
In April, the $174 billion-asset company plans to implement a feature that will provide instant access to up to $500 from check deposits. It also expects to cut overdraft fees from $36 to $15 in July.
In addition, the Columbus, Ohio-based bank will reduce the fee it charges when a transaction is rejected because the customer does not have sufficient funds — also from $36 to $15.
The reduction in overdraft fees will cost the Columbus, Ohio-based bank about $14 million per quarter, but it will more than pay for itself over time, Chairman and CEO Steve Steinour said Tuesday. Huntington reported $372 million in service charges on deposit accounts last year.
“Over a few years, we’ll make that back — new customers, lower attrition, more business,” Steinour said in an interview. “There is some near-term pain or challenge with some of the decisions we’ve made, but we believe they’re in the long-term best interests of our customers and therefore of our shareholders.”
Across the banking industry, overdraft fee income, which totaled $17.2 billion in 2019, fell to about $10.5 billion in 2020, as banks reduced fees or waived them during the pandemic, and as consumers were flush with cash from government stimulus payments.
Many banks are making changes to their overdraft policies as Biden-era
Huntington began liberalizing its retail banking policies in 2010, with the introduction of a feature that provided 24 hours to remedy an overdraft before a fee was charged. Huntington extended 24-hour Grace to business customers in 2020 and established a $50 “safe zone” within which no overdraft fees are charged.
Last summer, Huntington introduced Early Pay, which gives customers with direct deposit access to their paychecks up to two days early.
It also
On Tuesday, Steinour said Standby Cash has been “hugely embraced” by both depositors and Huntington bankers. “You always hear about people getting taken advantage of. This is the exact opposite,” he said.
The Early Access feature that’s set for release next month is intended to help customers who live paycheck to paycheck, according to Steinour. “Things like depositing a check and getting cash back are very important,” he said.
By charging $15 for an overdraft, Huntington will adopt the price recently set by