Ally Financial is First Major Bank to End Overdraft Fees
It's been a very long year, and Americans are ready to bust out for some fun this summer, and frankly, we could all use some good news. Well, this ought to do the trick.
In a huge move, Ally Financial, which is the nation's 18th largest bank, is ending all overdraft fees for bank customers, effective immediately. Banks have relied on overdraft fees to boost their bottom line for decades, and last year alone the fees generated about 12 billion dollars. Billion. The outrageous fees had been suspended by most large financial institutions last year during the coronavirus pandemic, but no doubt they were on their way back.
The Charlotte, North Carolina-based bank made the announcement on Wednesday, June 2, and cited several reasons for the bold move, including the impact overdraft fees had on Black and Latino households. The Associated Press stated, via KLFY that these families are "historically poorer than their white counterparts and are hit with overdraft fees more often. It’s also a common reason why Black and Latino households choose to be “unbanked,” that is being without a bank account, in order to avoid the fees that often come with these accounts."
The pressure by politicians to end overdraft fees has been ramping up in the last couple of years, and the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency have also been applying pressure to banks to come up with a solution other than a $35 overdraft fee.
A representative for Ally said the move will affect 3.6 million checking, savings and money market customers.
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