KeyCorp is planning to lower the price of an overdraft fee from around $33 to $20, and to reduce the maximum number of charges that customers can incur daily from five to three.
The Cleveland-based company also plans to eliminate fees charged when a transaction gets rejected because the customer lacks sufficient funds in their account.
In addition, Key said that it will provide free overdraft protection for all accounts that customers link to each other, and it will no longer charge overdraft fees for negative balances of less than $20.
The changes were announced Wednesday and are set to take effect sometime in late 2022. They are the latest in a
Numerous banks have ditched nonsufficient fund fees, capped the number of overdraft charges that customers can incur in a single day, and pledged not to collect the fees when accounts are barely in negative territory.
The rising number of large and midsize banks eschewing overdraft fees comes amid growing competition from challenger banks offering overdraft fee-free accounts and heightened pressure from regulators, consumers and advocacy groups who say that such fees disproportionately affect low-income customers.
KeyCorp, the $181.2 billion-asset parent company of KeyBank, previewed its upcoming overdraft policy revamp at its March 1 investor day.
KeyBank currently charges overdraft fees that range from $28 to $38.50, depending on the account and the incident that caused the overdraft, a company spokesperson said Thursday.
In addition to the changes announced this week, KeyCorp said that it plans to introduce other options that will provide more liquidity to customers.
Those changes include immediate access to mobile-deposited funds, a new small-dollar lending product and early wage access to allow customers to receive their paychecks up to two days early. The bank did not provide product details or a launch date for those options.
