Wells Fargo has launched a new checking account that has no minimum balance requirements and charges no overdraft fees, fulfilling a promise by CEO Charlie Scharf to establish a consumer-friendly account similar to those offered by rival banks.
Wells said Tuesday that the account, which will typically cost users $5 a month, is designed for consumers who are seeking help in managing their spending, or those who are new to banking. The San Francisco company is waiving the monthly fee for primary account holders ages 13 to 24.
Still, Ed Kadletz, who heads Wells Fargo’s deposit products group for consumers and small businesses, said he expects the new account to attract customers across multiple age groups. “I think it’s going to appeal to those customers that are looking for a low-cost alternative,” he said.
When customers attempt to spend more than they have in the account, known as Clear Access Banking, the transactions will generally be declined. While the account does not come with checks, customers receive a debit card, access to bill pay, and the ability to send money over the Zelle network.
Scharf
The account has been certified for meeting standards, developed by the Cities for Financial Empowerment Fund, that aim to improve the welfare of consumers who lack strong ties to the mainstream financial system.
Other banks that offer accounts that meet those standards include Bank of America, Truist Bank, KeyBank, JPMorgan Chase, Citibank and U.S. Bank, according to the Cities for Financial Empowerment Fund.
In aggregate, banks with at least $1 billion of assets collected $11.68 billion in revenue from overdraft fees and nonsufficient-funds fees in 2019, according to a June report by the Center for Responsible Lending. That figure was up from $11.18 billion in 2015, which was the first year for which the Federal Deposit Insurance Corp. reported the data.
