Overdrafts

The Cincinnati company's new Momentum checking and savings will give customers extra time to avoid overdraft fees, quicker access to paychecks and the option for advances on future direct deposits.

Some institutions for more than a year have reduced or eliminated overdraft and funds transfer fees to help members hard hit by the economic downturn, but it's unclear how much longer they can keep coasting on other sources of noninterest income.

The San Antonio company will no longer charge fees on transactions of $100 or less that take checking account balances into negative territory, as long as the customer has a $500 monthly direct deposit set up.

The company will give retail account holders 24 hours to cancel upcoming payments that would put them in the red. The move addresses customers’ top gripe and will have benefits that offset the lost income, executives say.

The Cities for Financial Empowerment Fund, a nonprofit that seeks to improve financial stability of low- and moderate-income households, validated the account under its Bank On initiative.

More banks are discussing the status of overdraft practices, and the industry is bracing for the potential of new regulations under President-elect Joe Biden.

The bank disclosed in a regulatory filing that it is in the process of responding to a civil subpoena from the Consumer Financial Protection Bureau. It is the latest bank to come under regulatory scrutiny for the fees charged to consumers who overdraw their accounts.

Deposits have piled up, curtailing overdrafts and other fees. The trend could force lenders to find other ways to make money — or start cutting to the bone.

The fees have helped banks recoup costs of free or low-cost checking accounts for decades, but they can penalize low-income customers and drive them away from banking. Is there a better way?

The bank said the account is geared to consumers who want better control over their spending or are new to banking.

T-Mobile Money is now being offered to the 150 million customers of the combined wireless carriers, which merged this spring.

T-Mobile Money is now being offered to the 150 million customers of the combined wireless carriers, which merged this spring.

The bank has agreed to pay $97 million in customer restitution and a $25 million fine to settle allegations by the Consumer Financial Protection Bureau that it deceptively charged overdraft fees for certain ATM and debit card transactions.

While most companies that offer early access to wages sell to employers, Earnin is providing direct access to workers in an attempt to mitigate overdrafts and subsequent bank charges.

The bank’s Asia-Pacific chief backs law giving greater mainland control over the territory; the Center for Responsible Lending said big banks took in almost $12 billion in overdraft fees last year, with the bulk of it paid by lower-income customers.

The panel shot down a proposed interim final rule regarding time limits for overdrafts, the first time in recent memory that an issue before the board did not have the votes to pass.

The government's latest stimulus package cleared the House on Friday but a number of key credit union priorities didn't make the cut.

Some bankers, economists, policy experts and even Mark Cuban say that creative uses of overdraft programs could be lifelines for consumers and businesses whose finances have been upended by the coronavirus crisis.

The billionaire investor and entrepreneur sees problems with small businesses having to apply for loans to get coronavirus relief. He says a more efficient approach would be to let them run negative balances on their bank accounts.