With government pressure Bank of America leads the charge in change today by announcing there will no longer be charge $30 to $40 for over drawing users. This change will take effect sometime this summer. For years there has been a great outcry by consumers who could be charged repeatedly for each overdraw. Since BofA would allow debit transactions to go through even though the consumer may not have enough funds. This typically lead to consumers spending repeatedly throughout the day and racking up a huge fee charge. Most of these transaction charges are under $20 but the penalty fees double the purchase cost.
BofA is expected to lose $39 million in overdraw and insufficient fund fees with this new policy change. With the negative backlash BofA received from the TARP (Troubled Asset Relief Program) BofA is gambling that this move will help land them customers and good will. Rumors of other banks following suit reduce the risk somewhat but BofA will be seeking a new way to make up that loss. Consumer advocacy groups worry that a whole new set of fees will be applied to customers.