Bank of America and Chase Announce Limited Changes to Overdraft Policies

In response to increasing consumer ire and legislative attention from Congress, Bank of America and Chase have recently announced some upcoming changes to their overdraft policies. Here are some of the highlights for each:

Bank of America

1. B of A will no longer charge an overdraft fee when a customer's account is overdrawn by less than $10 in one day. (However, the balance must be restored to the account within 5 days to avoid the $35 fee).
   
2. They plan to limit to four (4) the number of times that an account can be charged an overdraft fee in one day. (note: still, that's a maximum of $140/day in overdraft fees if you're not careful!).
3. Customers will be allowed to opt out of overdraft protection programs. In that case, pending charges will be denied at the register.
   

Chase:

1. Starting sometime before March 31, 2010, banks will make all overdraft protection programs opt-in (rather than opt-out), which means consumers will be made more aware of the financial implications of the program and whether it is right for them.
2. Chase will also stop practicing "transaction stacking," whereby they process charges in the order of largest to smallest, thereby increasing the chances for paying overdraft fees. Moving forward, they will process transactions in the order that they are made.
   
3. The bank will not charge an overdraft fee if an account is overdrawn by $5 or less.

All of these changes may be too little, too late, however. For most types of transactions that currently result in overdraft fees, they will be unaffected by the new rules, meaning customers will still be out billions of dollars collectively in overdraft fees.

Of course, the very best way to avoid this entire mess is to find a bank that does not charge overdraft fees - even when you overdraw your account. You can find a list of banks that do not charge overdraft fees at: http://www.escape-overdraft-fees.com/.

For more on how to avoid overdraft fees,: http://www.squidoo.com/banks-without-overdraft-fees/.