Bank of the West eliminates two overdraft-related fees

Bank of the West, which is in the midst of a sale to BMO Harris Bank, has eliminated two overdraft-related fees.

The San Francisco-based company said Tuesday that it is ending nonsufficient-funds fees, which it previously charged when customers tried unsuccessfully to spend more money than they have in their account.

Bank of the West, a $94 billion-asset subsidiary of BNP Paribas, is also eliminating fees that were paid by customers whose accounts were overdrawn by at least $15 for five days. 

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Both changes apply to personal and certain business accounts, and they are effective immediately, according to a Bank of the West statement.

However, Bank of the West's general overdraft fee, which charges customers $35 per item paid into overdraft if the account is overdrawn by more than $5, will continue, according to Grady Bond, head of deposit product and strategy at Bank of the West.

"We regularly review our fee policies and pricing," Bond said in an emailed statement. "As any future changes are made, we will announce those at that time as well as communicate changes to customers directly."

The decision to eliminate certain overdraft-related fees follows similar moves by other large banks over the last year. Regulators have been putting pressure on banks to reform their overdraft fee practices.

Last month, the Federal Deposit Insurance Corp. issued guidance to FDIC-supervised banks to reduce the number of NSF charges levied on unpaid transactions that are repeatedly presented and denied.

Consumer banking

The rapid demise of NSF fees

More than half of the nation's 20 largest commercial banks, including Citigroup and PNC, have stopped charging nonsufficient-funds fees, and another four are scheduled to end the practice by year-end. That leaves three holdouts: SVB Financial, Huntington and MUFG Union Bank.

By Allissa Kline

August 18

BMO Harris, the U.S. arm of Canada's Bank of Montreal, announced plans over the summer to reduce its overdraft fee from $36 to $15, among other overdraft-related changes.

Bank of the West and BMO Harris are seeking regulatory approval from the Federal Reserve and the Office of the Comptroller of the Currency as they push to complete their $16.3 billion merger by the end of this year.

At a public hearing on the deal in July, several community groups withheld their support, as negotiations continued on commitments to help underserved communities.

The deal would expand BMO's presence on the West Coast — Bank of the West has the eighth-largest market share in California — and allow it to establish footholds in Colorado, New Mexico and Oregon.