IMGCAP(1)]
Bank of America Corp. and JPMorgan Chase & Co., two of the nation's largest debit card issuers, have altered their debit card overdraft policies, a source of huge revenues for issuers and the ire for consumer groups and lawmakers. New York-based Chase says it is eliminating overdraft fees on debit cards unless the customer opts in to overdraft services. The bank also is eliminating overdraft fees if a customer's account is overdrawn by $5 or less, reducing the maximum number of overdraft fees per day from three to six, and posting debit card purchases and ATM withdrawals as they occur instead of processing the largest transactions first, which in the past has led to overdraft charges for small purchases. Chase is the nation's third-largest debit card issuer with 28.2 million cards, according to the 2010 edition of the ATM&Debit News EFT Data Book, which publishes tomorrow. Chase says it is changing its overdraft policy to assist customers in today's challenging economy. "We recognize the tremendous growth in our customers' debit card usage, and we're revamping our overdraft policies and posting order to be more consistent with the way they use their accounts," Charlie Scharf, Chase head of Retail Financial Services, said in a statement issued today. Chase's debit card overdraft changes take effect 2010's first quarter. Beginning Oct. 19, BofA says it will begin a two-phase process to create more bank-policy transparency with accountholders, but the bank does not specifically mention debit cards in its news release. BofA describes the changes as "checking account options." The Charlotte, N.C.-based financial institution will not charge overdraft fees if a customer's account is overdrawn by less than $10 for one day. BofA also will not charge overdraft fees on more than four items per day, and the bank will improve the process for customers to opt out of overdraft protection. Beginning next June, BofA will introduce an annual limit on the number of times customers can overdraw their accounts at the point of sale. In addition, BofA employees will provide customers the choice to opt in to overdraft protection when they open an account. "With these changes, we have increased customer choice in the area of overdrafts, limited daily overdraft fees and significantly reduced fees for those customers who need the most help," says Susan Faulkner, BofA customer segments and deposits executive. BofA, which issued 36.5 million debit cards as of the end of 2008, is the nation's largest debit card issuer, according to ATM&Debit News. Bank of America announced its changes Tuesday.
